While Lafuma sales were up by 12.3% for the 2005 fiscal year to 202.0 million ($257.0 mm) compared 180.0 million ($219.1 mm), much of the growth stemmed from the fourth quarter acquisition of Oxbow, the French lifestyle surf company. Organic sales were actually down 3.6% for the year, due in large part to weakness in the Lafuma brands camping equipment and furniture sales, which declined 8.6% and 15.8% respectively.
The company said that the decline is mainly due to strong competition in these categories for “entry level” products in Germany, Holland and the U.S. Lafuma management also said that they have “already reacted to this situation” by ramping up product design. Management also stated that the slowdown in business, combined with costs for integrating Oxbow, will impair operating profits and the level of net profits will be close to that of 2004.
Sales at Millet increased 5.3% while the companys high-end hunting and equestrian brand, Le Chameau, saw sales increase 4.0%. International business, including the U.S. subsidiary based in Colorado, reported a sales increase of 7.5% with organic growth at roughly 1%.
The Oxbow acquisition added roughly 23 million ($28.0 mm) to total sales for the year while the addition of the Ober brand added approximately 7 million ($8.5 mm). The Technical division of Millet and the Country division of Le Chameau both experienced solid growth in spite of “a difficult market environment.” Export sales for the two divisions grew by 5.3%.
Sales trends for 2006 seem to be positive, with a focus for the year on implementing the development plan for Oxbow, which now make up a 4th division of the Lafuma Group — board sports. Management has implemented a rapid integration plan in order to “fully capitalize on all existing synergies.” The company plans to present further details of this plan at its annual results presentation in December. Focus is also on growth in the 3 other divisions, especially for the Lafuma brand.