“Milavista” operates in the red
“Milavitsa”, Belarusian manufacturer of women's lingerie works only 3 days a week. Sales decrease is recorded by all brands Estonian holding company Silvano Fashion Group (SFG) works with – Milavitsa, Alisee, Aveline, Lauma Lingerie and Laumelle
Over the 1st quarter of this year SFG sales decreased by 51.8% to 13 mln. euros according to the financial report, the company posted on the Tallinn Stock Exchange website.
SFG suffered wholesales decrease of 58% to 9.2 million. euros and retail sales drop of 21.4% to 3.9 mln. euros.
There’s been a decrease in market sales of 62.1% to 6 mln euros in Russia, 26.7% to 5 mln. euros in Belarus and 84.2% to 220.000 euros in the Ukraine. Since the beginning of 2015 SFG holding has been working with a loss of 349.000 euros.
The company finished the last year with a profit of 10.6 mln. euros. Total sales volume exceeded 100 mln. euros in 2014, which is 20.6% less than in 2013.
There are 56 own and 8 franchise stores selling SFG products in Belarus. Estonian Holding owns 84.9% shares in JV “Milavitsa”. More than 90% of the SFG’s total sales is accounted for the Belarusian company. The lingerie manufacturer had to switch to a three-day workweek due to the sales decrease, as the company’s CEO Elena Tkachenko said in the inreview with TUT.by, the leading Belarusian news website.
“We expect this to be a rather short period, presumably less than a month,” – “Milavitsa” CEO said. “There has been a decline in the purchasing capacity at the company’s three major markets – Russian, Ukrainian and Belarusian,” – Elena noted. “We have always been selling four of five items at these markets. The situation in Russia, Belarus and in the Ukraine is complicated, thus, objectively there’s been a drop in purchasing capacity due to the crisis. And this is reflected in our sales as well,” – Elena Tkachenko says.
She noted, that the average decline of the purchasing capacity in the industry is estimated at 40%.
“But we believe that we’ll finish this active sales season – June till August – as an industrial trend or even with the 10% profit,” – the JV “Milavitsa” CEO says.
The company is going to expand capacity and production this year. “We expect retail growth starting this Fall,” – Elena Tkachenko ads.
It’s a shame that Milavitsa hasn’t fully explored a UK Operation. The Products produced in Belarus would be at home in Marks and Spencer, Fenwick, House of Fraser or Debenhams. The UK and US could be more lucrative than more traditional markets, but Milavitsa would benefit from paying someone to look at the market for them. Aspirational Products in currency sensitive markets isn’t so great, but maybe it’s time for Milavitsa and others producing great products in Belarus to work with people happy to sell on their behalf.
As far as I know Milavitsa sold its products in the UK. But not under its own brands but through M&S. It’s actually common practice here. Belarusian products are of rather good quality but Belarusians are really bad in marketing. It is difficult to promote Belarusian product on highly competitive markets such as UK or USA