Fewer suits sold
Corona hits fashion house Suit Supply hard: mega loss of
110 million euros
18 August 2021
15:05
Updated: 18
August 2021 20:46
Due to corona,
the turnover of the fashion company plummeted. Image © ANP
Fashion house
Suit Supply has booked a mega loss of
almost 110 million euros in the corona year 2020. The financial buffers
evaporated. Nevertheless, the Amsterdam-based company thinks it can keep its
head above water.
This is evident
from the annual figures filed with the Chamber of Commerce, about which Quote
was the first to report.
Hard hit
Suit Supply was
founded in 2000 by entrepreneur Fokke de Jong and grew into an international
fashion house with a turnover of 336 million euros in 2019. The company had 126
stores worldwide at the end of last year and accounted for 1300 full-time jobs.
But last year
Suit Supply appears to have been hit hard by the corona crisis. In the annual
report, De Jong writes that the stores remained closed for a large part of the
year, resulting in substantially less sales.
Decline in
turnover
Also because
offices and other workplaces remained closed and weddings, fairs and other
social events were canceled, far fewer consumers were fitted with a new suit or
shirt.
As a result,
turnover plummeted by 39 percent in 2020 to 205 million euros. Of this
turnover, 37 percent was recorded in the US and 18 percent in the Netherlands.
Mega loss
Despite state
support and cost savings, Suit Supply posted serious losses last year. The
annual accounts show that the net loss amounted to almost 110 million euros.
That giga loss
completely wiped out the company's financial buffers. The company's equity
decreased from 46 million euros positive at the end of 2019, to 53 million
euros negative at the end of last year.
To ensure suit
supply would have enough cash in hand to
deal with the problems, the company signed an additional financing deal last
year. This consisted of 50 million euros in additional loans, deferrals of
payments and capital injections by shareholders.
Also for this
year, the company, which is partly owned by investment company NPM
Capital,expectsCovid-19 to negatively affect its results. In the first quarter,
turnover was 45 percent lower than in the comparable period last year.
Possible rescue
plan needed
In the
unqualified opinion accompanying the financial statements, auditor Deloitte
warns of 'uncertainties regarding the continuity' of the company. However, Suit Supply claims to be able to
survive thanks to state aid, cost savings and last year's financing deal.
However, this
assumes a recovery in turnover in the rest of the current year and in 2022. If
the company cannot meet the criteria for the loans, it expects to conclude a
new bailout plan with the banks and shareholders.
Suit Supply CEO
Fokke de Jong
© ANP / photo by
Patrick MacLeod/WWD/REX/Shutterstock
Fokke de Jong:
'strong recovery'
In a response
from the US, major shareholder and director Fokke de Jong points out that suit
supply's net loss is partly the result of one-off costs. "For example, due
to corona, we had to take provisions on our stock positions, and write off
loss-making stores."
The market has
also picked up considerably over the past six months, he says. "The first
quarter was still bad, but since then we have seen a strong recovery in all the
regions where we operate. There is, of course, a postponed question.
Eventually, marriages and bar mitzvahs
go on anyway. As a result, there are rows in front of the door here and
there. So we are much more positive than we were at the beginning of this
year."
According to De
Jong, Suit Supply did not find himself in the situation in recent months that
additional financing became necessary. "If necessary, I and NPM are of
course ready to support the company. But for now, our biggest challenge is to
have enough staff and enough stuff."
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