ECCO reported that lower consumer traffic and stymied spending in markets along with cash-flow constraints and fluctuating currencies dropped fiscal 2009 revenue 6% to DKK 504. billion ($944.2 million) from sales of DKK 5.37 bn ($1.06 bn) in the prior-year period. In a presentation to investors, management for the Danish shoe maker said weakness in key markets, especially the U.S. and Russia, slowed performance, but added that strength from China, Australia, Poland and Canada was promising for the companys global platform.

 

Pre-tax profit fell 38% to DKK 460 million, a slip that management said was acceptable considering the global economic conditions. Net loss for the year, which included exchange rate on debt in foreign currencies, was DKK 36.3 million ($6.8 million) as compared to DKK 81.2 million ($16.0 million) in 2008.

 

Margins fell to 9.8% of sales as compared to 15.4% of sales in fiscal 2008. By product segment, net shoe sales slipped 6%, although average selling prices inched up 2% on new initiatives such as investments in new ECCO stores. Sales of accessories were up 10% while sales of leather and wet blue remained stable.

 

Inventory levels were reduced by 21% and cash flow was significantly improved which ECCO said strengthened financial stability. At year-end, ECCOs solvency ratio increased from 56% to 58%.

 

Management added that altered market conditions prompted the company to cut costs in all areas of business, including reducing staffing levels to adjust capacity in production units, which had an impact of DKK 54 million as a non-recurring cost.

 

During 2009, ECCO opened 140 new stores, bringing its worldwide store count to 901 total stores. ECCO also increased its number of shop-in-shops to 1,278.

 

For 2010, management said ECCO expects modest growth in revenue and profits, which the company said will continue to be affected by the global financial crisis.

 

Regarding products, ECCO said its BIOM running collection was very well received in the market and will be extended with additional models in 2010. During 2009, ECCO also opened a new development center in Thailand in order to complement the companys R&D centers in Denmark

and Portugal.