IC Companys – Annual Report 2008/09 0 - IC Companys A/S

From foundation to distribution
As the new Executive Board was appointed in August
2008, it was with the clearly defined target to generate
increased growth and earnings. As it turned
out, the foundation for such a journey was not entirely
in place – a fact that was compounded by a
financial crisis the proportion of which came as a
surprise to most.
Building a sound foundation in the form of best
practice processes and efficient organisational
structures thus became the primary focus. First and
foremost, it was essential to increase the executive
momentum. The Executive Board was expanded
from two to four members, and a number of key
executive positions were quickly filled. The set-up of
a deliberate distribution strategy followed, while at
the same time initiating an actual value chain optimisation.
Seen in the light of the economic crisis, it
was furthermore important that this new foundation
underpinned increased flexibility, a cost base reduction
and improved working capital. A considerable
effort was demanded from all employees and involved
quite a few unpleasant, but necessary decisions.
Against this background it is very satisfactory that
the result today is a strengthened organisation that,
under the present circumstances, reports satisfactory
earnings and a solid cash flow. In addition to
this, a long period characterised by increasing costs
was brought to a close. Compared to last year, the
company today is thus strengthened on account of
reviews of the internal processes and structures and
adjustments made where required. As such, the
foundation is in place.
Undoubtedly, reaching the target of increased
growth was not given first priority in the financial
year 2008/09. A fact directly translated into revenue,
which decreased by 4%. This is unsatisfactory,
although the economic crisis shaped a difficult starting
point for growth. In the financial year 2009/10,
the target of future growth will become primary focus.
A clear target will thus be to turn the negative
development in order intake and thus generate an
actual growth in the financial year 2010/11.
Collection structures were adjusted to match the
flow out of the stores in the future. In conjunction
with order suggestions, the new delivery pattern will
become an integrated part of the buying process in
own retail. In the order intake for delivery in
2010/11, this will also be offered to the Group’s
wholesale customers. A part of the Executive
IC Companys – Annual Report 2008/09
Board’s strategy is the expansion of revenue from
own retail and franchise so as to develop these distribution
channels to constitute a larger part of the
total distribution in the future. To that end, a fullrange
franchise concept was developed to be used
actively in attracting new franchise partners. Further,
expansion of own stores with focus on selected concepts
and markets is prioritised.
In addition, a new business model for wholesale customers
will be implemented: Controlled space. In
addition to allowing an efficient sell-through, the
new business model will ensure significantly lower
tied-up funds, not only for wholesale customers, but
also for IC Companys. The project time frame is set
to the next two years taking effect in the financial
year 2010/11.
E-commerce is an increasingly expanding distribution
channel. The Executive Board believes that ecommerce
holds a considerable potential for the
Group brands. In continuation of the Executive
Board’s focus on distribution and with a view to optimally
harnessing this new distribution channel, IC
Companys entered into a partnership with one of the
world’s leading e-commerce partners, (GSI Commerce
Inc.) The agreement includes the exclusive
right of sales of 9 of the Group brands (excluding
Designers Remix Collection and Saint Tropez). The
partnership will be initiated with Peak Performance
and is expected to be commenced at the end of September
2009.
“IC Companys owns a very interesting
mix of brands each
with a high level of fashion
awareness in many markets.
Therefore we see a huge potential
in this partnership.”
Steven C. Davis, GSI
EVP & President, Int.
With a view to taking the Group brands to the next
level of development and to meet the demand for
future growth, the Executive Board has initiated a
strategy process. The result will be a prioritisation of
the individual brands and markets ensuring a focused
and efficient effort.
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