Q2 2022 – Financial highlights
H1 2022 – Financial highlights
Nelly must return to profitability
Our continued transformation towards profitability, which has now been intensified, means that we are refining our customer journey and simplifying all areas of our business.
During the first half of 2022, we saw weak financial performance for Nelly and a decline in total customer traffic, which clearly shows that we did not deliver what our customers want frequently enough in a manner that also generates stable long term profitability. During the past quarter, we have initiated an extensive transformation across all parts of our business, and this work will continue in the coming quarters.
Fast pace of change
We appointed a number of new leaders in June, including the Chief Assortment Officer and the Chief Technology Officer. I was appointed to the role of acting CEO. Nelly Group also announced that Ludvig Anderberg has been appointed as the new CEO. He left the company in 2018 and will return in this role on 22 August. In connection with these changes, many skilled employees in the company were given the opprtunity to assume greater responsibilities. All these appointments were handpicked from internal candidates to create a strong management team with deep knowledge of fashion, extensive understanding of our customers and proven ability to drive transformation. We are now working together to simplify our crossfunctional core processes to move towards profitability and refine the Nelly customer journey.
Our assortment strategy has been revised to optimise the autumn and spring collections, creating an offering that better meets our customers’ needs and is easier to navigate. We will also focus on our own high-margin brands to an even greater extent and invest more selectively in external brands and categories where we see both demand and profitability. More generally, we will reduce the breadth of our assortment considerably and make it easier for our customers to find what they want.
In the coming quarters, we will continue to implement changes to strengthen our business and reduce costs. This will be done through higher efficiency and simplification in areas where complexity does not add value. For example, this applies to our portfolio of systems. We have a large number of IT systems, which all need maintenance but may not all be needed in the future to deliver a great customer journey. Here, we will optimise and rationalise. We also need to continue to enhance our logistics efficiency, primarily through our automated warehouse, which, in June, delivered our lowest ever cost per item handled.
As we enter the second half of 2022, we do so with a strong team, a clear plan and our customers and products firmly in focus. Nelly’s deep-rooted strengths lie in our skilled staff, our origin as a pioneer of e-commerce and, above all, in our brand’s broad follower base among young women in the Nordic region. We are resetting the company to achieve profitability before we once again prioritise growth.
Acting CEO of Nelly Group AB
Borås, 15 July 2022
Nelly Group AB (publ)
501 13 Borås, Sweden
Corp. ID 556035-6940
Registered office: Borås
Visiting address: Lundbygatan 1, Borås
Webcast on the H1 report
Analysts, investors and the media are invited to a webcast on H1 on 15 July at 13.00. The presentation will be delivered in English by CFO John Afzelius. The webcast will be made available on the Nelly Group website.
The presentation material and the webcast will be available at www.nellygroup.com/en/investors/presentations/