VRG S.A. Group summary of the results for 2020 (IFRS16)

VRG S.A. Group summary of the results for 2020 (IFRS16):

•    Sales: PLN 853.7 million (-20.1% yoy) – the result is better than the baseline scenario which assumed a sales drop down to 25% due to the impact of COVID-19
•    Net profit (loss):  PLN -48.2 million
•    Gross margin: 48.9% (-3.2% YoY) – due to a bigger share of online sales throughout the year and higher promotions
•    Selling, general and administrative expenses (SG&A): PLN 416.8 million (-11.2% yoy)
•    Store network: 570 stores (-20 yoy) in 106 cities (+2 yoy), 154 franchise stores (+8 yoy), 53,000 m2 of space (-2 p.p. yoy)
•    Online: 24.3% share in sales (+11 p.p. yoy)
•    The Group’s net debt under IAS 17: PLN 53.7 million at the end of 4Q20, halved yoy.

Consolidated sales revenues of the VRG Capital Group were at PLN 853.7 million, about 20% less than in 2019, a record year for the company. The decrease in revenues was directly caused by restrictions on trading in physical stores due to the development of the epidemic situation in Poland. Despite selling exclusively through the online channel for almost a quarter of the year, VRG managed to meet the baseline scenario of revenues dropping down to 25% year-on-year. Consolidated net loss totalled PLN 48.2 million, compared to a PLN 64.0 million profit in 2019.

The Group closed the year with 570 stores in 106 cities across Poland, which translated into 53,000 square metres of space. “Throughout the year, we took a more firm approach to optimising the retail network, departing from the strategy of increasing the floor space on which the company operates. We did not hesitate to close down low-profit stores. New locations are now selected carefully. In the jewellery segment, we focus on expanding the network of our own stores. As for our clothing brands, we focus on developing franchise outlets which are more cost-effective for our company” comments Radosław Jakociuk, VRG’s vice-president of the board.

Pandemic restrictions on trade in physical stores have resulted in a dynamic growth of sales in the online channel. In 2020, VRG Capital Group's online stores sales totalled PLN 207 million, a 43% increase year-on-year. In the Group's revenues in 2020, the internet channel accounted for as much as 24.3%. (compared to 13.6% in the previous year). As in previous years, the leader of internet sales among all of the Group’s brands was Wólczanka, whose online sales went up by 22% and the share of the online channel in the brand's revenue stood at 56.4%.

The clothing segment reached a revenue of PLN 501.4 million (a 28% drop year-on-year), as a result of the year-round restrictions on the social and economic life, which translated into limited demand.  W.KRUK, the brand representing the jewellery segment, did well in those difficult conditions. Revenues of the jewellery segment amounted to PLN 352.3 million, 6% less than in 2019.

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VRG S.A. (formerly Vistula Group S.A.) has been listed on the Warsaw Stock Exchange since 1993.
The VRG S.A. Capital Group specializes in the design and distribution of high-quality fashion collections for men and women and jewellery. It owns very well-known trademarks in five main product lines: Vistula, Bytom, Wólczanka, Deni Cler Milano and W.KRUK. The VRG S.A. Capital Group focuses on brand management, clothing and jewellery design and the development of its own sales network in both of its core segments (clothing and jewellery). Since 2000, VRG S.A.’s strategy has relied on following the House of Brands model and being a distributor in the retail market.