Vendex KBB reports satisfactory sales increase in economic slowdown

Royal Vendex KBB N.V. recorded generally higher sales in the first half of the fiscal year 2002/03 (February to July).

Excluding the effects of divestments and acquisitions, the sales of five of the six business units showed an increase. HEMA, Bijenkorf, Fashion, DIY and Consumer Electronics all reported higher sales figures; V&D reported a decrease. On balance the comparative sales figure rose by 2.8% (first quarter 3%, second quarter 2.6%). The rapidly worsening economic climate had a negative impact on the course of sales in the second quarter.

Sales and results of the acquired Belgian DIY chain Brico are included in the consolidation with effect from April 1, 2002. Including Brico net sales of the continued activities rose in the first half year by nearly 10% to more than two billion euro. Total net Group sales (including discontinued activities, amongst others the six companies sold to CVC) amounted in the first half to 2.4 billion euro.

Since the beginning of the year economic conditions in the Netherlands have deteriorated very considerably. Economic growth estimates had repeatedly to be adjusted downward. Inflation has gone up and unemployment is rising. Consumer confidence - an important yardstick of the willingness to buy - has been sharply declining for six months already and reached its lowest level in July. According to the Central Statistics Bureau consumersÂ' willingness to buy is now at the level of the middle Â'eighties. This is reflected in consumer expenditures, which show lower growth percentages from month to month. According to official statistics, sales volume in the Netherlands nonfood retail trade fell by circa 1% in the first five calendar months. Consumer confidence and the willingness to buy also slumped in the other countries of relevance to the Group, though to a lesser extent than in the Netherlands. In Germany the trend of sales in the nonfood trade is worrying.

Department Stores
Sales of Department Stores rose in the first half by 1.7% to more than a billion euro. Growth in the second quarter was lower than in the first quarter (1.2% against 2.2%).

HEMA continued its good performance in the second quarter with a sales increase of 4.8% to 438 million euro (first quarter +4.7%). Business in Belgium was especially flourishing. Following a sales increase of 17% in the first quarter, sales in the second quarter were as much as 26% higher. To some extent the accelerated growth is attributable to expansion.
V&DÂ's half-year sales figure dropped by 3.6% to 396 million euro. The sales decrease in the second quarter was slightly less than in the first quarter. V&D is working on a fundamental change of its merchandising strategy. This includes a structural reduction of inventories, partly by running down the excessive stocks of outdated goods. The reduction began in May and is continuing on a large scale. This implies substantial price mark-downs. V&DÂ's efforts to sanitise the inventory position are well on schedule. Beginning in September the disposal of surplus inventories will be further supported by special bargain counters in 22 of the seventy department stores. Three will be refitted as outlet stores.

Bijenkorf recorded a 7.5% higher half-year sales figure of 173 million euro, due to the three new fashion stores that have been open since September last year. BijenkorfÂ's growth was distinctly slackening during the first half of the year. After a sales increase of 11% in the first quarter, growth slackened to nearly 4% in the second quarter. To achieve this sales increase considerable effort was put into extra selling activities and price mark-downs in BijenkorfÂ's most important product groups.

Specialty Stores
As a consequence of the sale of six Group companies to CVC and the acquisition of the Belgian DIY chain Brico, the composition of the group Specialty Stores has changed considerably. The comparative sales figure (continued activities, excl. Brico) showed a satisfactory growth of 5.4%. Including Brico (consolidated as of April 1) the sales of continued activities were up by m

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