Marimekko Corporation, Stock Exchange Release, 5 February 2014 at 8.35 AM
Marimekko is experiencing a dynamic phase of internationalisation. In 2014, the main thrust in expansion will be on openings of retailer-owned Marimekko stores and shop-in-shops. The aim is to open a total of 15-25 new Marimekko stores and shop-in-shops. Of these, 1-3 would be company-owned stores. Also, the company will concentrate on enhancing the operations of company-owned stores opened in recent years and improving their profitability.
The Asia-Pacific region is the company's second-biggest market area, and this year Marimekko will continue to underpin its position in this region. The prospects for the economy and retail trade are good in Asia, and the company sees growing demand in the region for its design. The intention in 2014 is to open at least six new Marimekko stores, two in Japan, two in Hong Kong, one in mainland China and one in South Korea. Marimekko's own stores in Australia have done well, and the company is currently seeking a location for a second store in Melbourne.
In the past two years, new markets have been opened up in China, Hong Kong and Taiwan. In mainland China and Hong Kong, it is intended to open 15 Marimekko stores by the end of 2016. The openings are proceeding according to plan: four stores have already been opened and another three will follow this year. In Taiwan, the intention is to open a total of five stores and shop-in-shops by the end of 2018. The first of these was opened in Taipei in November 2013.
With the exception of the Australian stores, all the Marimekko stores in the Asia-Pacific region are retailer-owned. This model ties up less of Marimekko's resources and guarantees an in-depth knowledge of the local market. The stores comply with the same concept as Marimekko's company-owned stores.
In North America, the focus of expansion this year is on developing shop-in-shop partnerships. Cooperation with the Canadian modern furniture brand EQ3 is proceeding as agreed. The intention is to open 10 Marimekko shop-in-shops by the end of 2014. Eight of these have already been opened - seven in Canada and one in the United States - and the remaining two will open this year in Vancouver and Burlington. The partnership with the leading Mexican department store chain El Palacio de Hierro continues: in autumn 2014, two new shop-in-shops will open in Mexico City, after which Mexico will have a total of six Marimekko shops.
The shop-in-shop partnership with the American home furnishings retailer Crate and Barrel will end in summer 2014. The reason behind this is changes in Crate and Barrel's strategic policies. Crate and Barrel's exclusive rights to retail Marimekko's interior decoration products in the United States and Canada in the home specialty and department store chain category were ended in 2012, since which time Marimekko has been able to sign partnership contracts with other high-quality department stores. The termination of the shop-in-shop partnership is of little financial importance to Marimekko. Crate and Barrel will continue to retail Marimekko products.
The United States has better economic forecasts than Europe, but its retail market is one of the world's most heavily competed. Marimekko has six company-owned stores in the United States which are still partly in the launch phase. These stores play a central role not only as a distribution channel but also in building the brand. Effort was put into developing the operations of the stores in 2013 and this work continues this year as well. For some stores, making improvements in profitability has proven more challenging than had been forecast, and sales have been weaker than expected. The company is currently negotiating the termination of the lease on the store in Beverly Hills and investigating possibilities for moving the store to a new location.
The economic prospects for the whole of Europe are unimpressive and growth is sluggish in the region. In Finland, the state of the retail market is currently extremely weak. Marimekko will concentrate in Northern Europe this year on developing the operations of its own stores, e-tailing and department store partnerships. Four openings are being planned, three of which are shop-in-shops.
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Marimekko is a Finnish textile and clothing design company renowned for its original prints and colours. The company designs and manufactures high-quality interior decoration items ranging from furnishing fabrics to tableware as well as clothing, bags and other accessories. When Marimekko was founded in 1951, its unparalleled printed fabrics gave it a strong and unique identity. Marimekko products are sold in approximately 40 countries. In 2013, brand sales of Marimekko products worldwide amounted to approximately EUR 191 million and the company's net sales were EUR 94 million. The number of Marimekko stores totalled 133 at the year end. The key markets are North America, Northern Europe and the Asia-Pacific region. The Group employs around 500 people. The company’s share is quoted on NASDAQ OMX Helsinki Ltd. www.marimekko.com