Fox ended the first quarter of 2021 with an increase in sales and a surplus, despite a 52-day close

Fox ended the first quarter of 2021 with an increase in sales and a surplus, despite a 52-day close during the quarter. The fashion retail group, led by Harel Wiesel, posted a bottom line profit of NIS 41.7 million, compared with a loss of NIS 37.5 million in the corresponding quarter, which saw a slowdown in sales and a deepening loss following the spread of the corona plague and the closure of stores in mid-March.
The group's revenues grew in the first quarter of 2021 by 34.5% to NIS 779.4 million. The increase in revenue was due to a consolidation of sales to Lynn since the fourth quarter of 2020, as well as due to high demand after the third closure, and an increase in the activity of the Group's trading sites, including Terminal X, Lynn, Shilab, Sachs and Fox Home.
The Fox Group's gross profit grew by 37.4% to NIS 417.5 million, and its share of sales increased by 1.2% to 53.6%.
Consolidation of results for Lynn and new retail space added by the group in favor of expanding sports chains and starting new activities in the international brands Jumbo and Flying Tiger, jumped management and general expenses by 42.2% and selling and marketing expenses by 8.6%. This is despite the fact that the main operating expenses were reduced in the third closure with the closure of the stores and the removal of the workers to another unit.
Fox moved to an operating profit of NIS 65 million compared to a loss of NIS 15.8 million in the corresponding quarter, following expenses to reduce expenses, and after in the corresponding quarter of 2020 recorded a one-time expense of NIS 6 million due to impairment of Urban Outfitters brands in Israel.
In the field of fashion and home fashion, the group's sales in the first quarter increased by 12.4% and amounted to NIS 362.6 million. In order to eliminate winter season inventory balances in the first quarter, Fox raised the discount rate on the winter collection before moving to summer season sales, a move that deducted 0.5% from the gross profit margin and dropped to 54.4%.
Although in the current quarter the stores were closed for about 50 days compared to 16 days in the corresponding quarter in 2020, sales for Lynn grew by 11.7% to NIS 50.4 million, partly due to increased sales at the end of the closure and an increase in sales at the trading site.
In the field of sports, in which the company operates through its subsidiary Retailers, which was issued about a week ago, sales grew by 35.5% and amounted to NIS 176.2 million.
The increase is attributed, among other things, to an increase in retail space in Israel, Canada and especially in Europe, as well as due to the slowdown in sales in March last year.
Sales in the same stores (branches that were active in both the reporting quarter and the corresponding quarter, used for comparison), excluding closing periods, ie between February 21 and March 31, increased compared to the same period two years ago (in 2019) in all sectors in which Fox operates.
In the fashion and home fashion sector, sales in identity stores increased by 117.8% to NIS 253.9 million, in the Lalin sector by 87.4% to NIS 31.6 million and in the sports sector by 114.8% to NIS 83.8 million.
Following an increase in morbidity, the government banned shopping in malls and streets from December 27, 2020 to February 21, 2021. Fox Group stores, excluding retail sites, were closed and only a few of Shilab's stores continued to operate.
Similar to previous closures, the group has made a number of cost-saving moves. These measures included, among other things, taking all employees and managers of the group on unpaid leave, except for dozens of individual employees and managers of the group's headquarters who worked on a part-time basis.
The group reached agreements with most of the landlords in Israel who waived their rent and management fees for the closure period, in part or in full.
Throughout the Corona period, the Group's online sites in Israel were fully operational and the Group operated a telephone sales network in some of the brands. Following the closure of stores, Fox recorded significant growth in site sales during the closure periods, which partially compensated for the decline in sales in the other sales channels.
The spread of the Corona virus abroad also affected the operations of the subsidiary Retailers and Lalin. Nike, Pot Locker and Lalin stores in Canada were closed for part of the quarter, reopened and closed again in the second quarter (current) and are expected to open on June 2. Retailers were shut down in Europe. Closures in the various countries in which the company operates.
Fox and its subsidiaries have a cash balance of approximately NIS 650.2 million, and with securities portfolios and deposits, the balance of cash and cash value is approximately NIS 920.8 million.