The VRG Group estimates that the level of revenues in 2023 should be higher than in 2022, both in the clothing and jewelery segments, and further work is planned in both segments to improve the gross percentage margin compared to 2022. The Group expects to achieve higher year-on-year operating and net results, the company said.
“The capital expenditures of the VRG Group planned for the current year in the amount of PLN 42 million will be allocated to the opening of new locations, modernization of existing stores and the implementation of market-proven IT technologies supporting the processes of allocation and replenishment of goods. The Management Board of VRG expects that if the new collections of the Group’s brands are well received by customers and favorable macroeconomic trends occur, the implementation of the above activities will allow for achieving higher operating and net results year on year. The Management Board of VRG monitors the sales and margin results of all the Group’s brands on an ongoing basis and will flexibly adjust its activities to the market situation, reads the company’s quarterly report.
In 2022, the company had PLN 92.96 million of consolidated net profit attributable to shareholders of the parent company, compared to PLN 66.31 million profit a year earlier, with sales revenue of PLN 1,273.95 million compared to PLN 1,069.93 million a year ago before. The EBITDA profit reached PLN 250.35 million compared to PLN 201.62 million profit in this approach a year earlier. Revenues in the clothing segment in 2022 increased by 13.8% y/y to PLN 648.2 million, while in the jewelery segment they increased by 25% y/y to PLN 625.7 million.
The company emphasized that the development prospects of the VRG Group in 2023 will be largely determined by external factors related to negative macroeconomic data affecting consumer sentiment through, among others, high level of inflation and the related increase in the cost of living for households.
“The unstable situation in world politics and threats related to the ongoing armed conflict beyond Poland’s eastern border may also adversely affect consumer behavior and their willingness to make purchases in the coming quarters. Considering these factors, we believe that thanks to the diversification of the Group’s business into the jewelery and clothing segments and a wide range of products for various consumer groups by brands operating in both segments, the level of revenues in 2023 should be higher than in 2022, both in the clothing and and jewelry. In both segments, further work is also planned to improve the gross percentage margin compared to 2022.
VRG indicated that the basis for the implementation of the above business goals is the VRG Group’s portfolio of brands with high recognition and good image, addressed to various consumer groups.
In terms of opening plans, the VRG Group plans to increase space in both segments (by 4% y/y).
“The development activities of the capital group in 2023 will focus on:
– striving to maintain the growth of revenues in both segments by improving the products of the VRG Group brands with particular attention to the best matching of the offer to the preferences and needs of the customer and the development of new assortments (increasing the width of the Vistula women’s collection, new categories of luxury jewelery and watches in the offer of W stores .Raven);
– optimization of the gross margin in the conditions of persistent inflation; − emphasis on the development of sales in the on-line channel thanks to the in-depth integration of own off-line and on-line channels as part of the omnichannel strategy, introduction of new functionalities in online stores, segmentation of customer information in order to better adapt products to their needs, development of sales applications , strengthening the presence of VRG Group brands in the offer of the most famous marketplaces and internet platforms;
– increasing expenditures on image marketing on the Internet and traditional channels;
– constant improvement in the quality of customer service in the stationary and online channels,” reads the report.
VRG specializes in the design, production and distribution of jewelry and fashion collections for women and men. Since 2000, the basis of the company’s strategy has been focusing on the function of “operator” of brands, clothing designer and distributor on the retail market. Its consolidated revenue in 2022 amounted to PLN 1.27 billion. The company is included in the sWIG80 index.