Charles Vögele Group, the European vertical fashion company, has posted a 4% fall in sales after currency adjustments for the first half of 2010.

Thanks to a higher gross margin, foreign exchange rate hedging and a strict cost management, the EBITDA margin was maintained at 6%, the company said. After deducting depreciation, this left a positive operating result (EBIT) of CHF4m (US$3.8m), which is CHF2.5m lower than the same period a year ago.

Despite lower net debt, net financial costs rose because of CHF4m of negative currency effects. The net result of a loss of CHF7m was slightly below the prior-year figure. This was due to the major clear-out of old stock, unfavourable exchange rates and the ongoing restructuring process.

The company said that sales were hurt by clear-out of old stock and negative currency effects, falling from CHF743m to CHF690m.

“As expected, selling off the remaining old stock proved difficult, but by making further price concessions it was possible to clear most of it. This process took up valuable sales space and resources; but happily, sales of new stock went up 4% after adjusting for currency movements,” a statement said.

The board of directors also announced that it had appointed Frank Beeck as the new chief sales officer.

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“Changes in organisational and process structures are well underway and will continue until 2012. In the transition phase the measures introduced will have a positive effect mainly on costs. Owing to the current streamlining of the portfolio and adjustments to the company’s image, improvements on the earnings side will only become evident in the medium term. The first signs of recovery on sales markets are appearing. However, the market environment remains difficult,” the company said.

A positive net result is expected for the year as a whole, and an EBITDA margin of 10% is expected in the medium term.