“Financial indicators reflect the situation on the market, both locally and Europe-wide. The 45 percent decline registered on the local market exceeds only Ukraine’s market. Other European markets, such as Greece, Poland, Italy, or the Czech Republic had declines worth no more than 7 percent,” said Stefan Treiber, CEO of Flamingo International.
In spite of the H1 financial results, Flamingo representatives are optimistic about the evolution of turnover in the second half of the year, as the company’s cost structure has been optimized, being reduced by 30 percent in June 2009, compared to the same period last year.
The company is presently operating 85 units on a total net sales surface of 46,200 square meters, compared to 114 stores on 59,000 square meters at the end of 2008. Likewise, the number of employees has been reduced to 650 from 1,100, and another 100 layoffs are expected by the end of the year, confirmed the Flamingo officials.
The optimism of Flamingo’s management for the second half of 2009 is due to the fact that the company’s sales in July increased 30 percent, while the market showed signs of a rebound, registering 15 percent growth. Flamingo officials are also betting on the holiday season at the end of the year, and a series of promotions, to lead growth to the estimated 39 percent of turnover for H2.
Flamingo’s General Shareholder Meeting approved the launch of a five-year bond issue on Monday, worth RON 29 million (€6.9 mln), with a 12 percent interest rate, after a request by the QVT Fund, owner of 22 percent of Flamingo’s shares, for the dissolution of the company was rejected.
