Marimekko has confidence in future regardless of economic uncertainties

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The Finnish textile and clothing design company Marimekko is facing a weak short-term future but strong long-term prospects, reported CEO Mika Ihamuotila on Thursday.
      In 2008, the Marimekko Group's net sales rose by 5% from the previous year, while the operating profit fell by some 5%.
     
The company’s net sales were EUR 81.1 million, which shows that Marimekko is a minor player among Finnish listed companies.
      The Group’s operating profit was approximately EUR 10 million.
      In the October-December period of 2008, the Group's operating profit fell by 45 % on the comparison period, amounting to just EUR 1.8 million.
     
The drop in sales and profitability was attributable to the crisis in the financial markets, which mushroomed into a global recession.
      Because of the weak global economic situation, Marimekko forecasts that this year’s net sales are to decline further by some 5 to 10 % from last year.
     
Nevertheless, Marimekko does not intend to start streamlining, which means that no rapid drop in the company’s expenditure is to be expected.
      For example the personnel costs of the company employing more than 400 people have increased by 25 % over the period of the last three years.
     
As a result of the decreased sales volume and the unchanged costs, the net operating profit for 2009 is predicted to remain clearly smaller than that for last year, Ihamuotila noted.
      In 2008, Marimekko allocated resources to the design of its products - colours and patterns - as well as to the development of its retail stores.
      According to Ihamuotila, this means that Marimekko’s employees and entrepreneur-retailers are now striving for the same goals.
      ”We wish to continue our development work despite the difficult business environment. We will launch new products and strive to reach new customer groups by opening new stores and distribution channels”, CEO Ihamuotila declares.
     
More growth is being sought from abroad. Marimekko’s exports and overseas operations increased by 7.3 % last year. According to Ihamuotila, the company’s target is an annual growth of 20 % in this department.


Previously in HS International Edition:
  Fashion: Marimekko reveals next autumn collection (27.1.2009)
  Kirsti Paakkanen sells her remaining Marimekko holding (9.1.2009)
  Paakkanen “shocked” at state of Marimekko (5.1.2009)
  COMMENTARY: Creases in the Marimekko frock (23.12.2008)

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