Global net sales for the fourth quarter (October to December 2008) fell to SEK 303.7 million, from SEK 323.7 million in 2007. The company’s operating loss during the period was SEK 58.6 million, compared to SEK 6.1 million year-on-year.
For the full year, the company reported net sales of SEK 892.5 million, down from SEK 930.1 million in 2007. The operating loss was down to SEK 44.8 million, compared to SEK 52.7 million last year.
The release of Brio AB’s financial results also showed that it is facing cash-flow problems. A statement from the company said:
“Brio is in a serious situation and the board deems that the Group with shortly face an acute liquidity shortage.”
The statement goes on to cite ‘significant structural problems’ over the past ten years, along with what it sees as an under-investment in product development.
Brio also explains that it underestimated the resources and time required to remedy the internal problems and to establish the new position in the market, resulting in all of the shareholder equity being utilised.
Finally, the financial situation is also sited, with a downturn in consumer spending putting extra pressure on the industry, leading to an increased capital requirement.
The statement concluded: “The board is working to immediately secure Brio’s capital supply in the short and long term and intends to submit a proposal by 13 March 2009 on refinancing, which can be carried out by means such as a newshare issue and loans from shareholders.”
The firm’s CEO, Andreas Sbrodiglia who started January 1st 2009, has developed a revised plan through to 2011 supported by its owners Proventus.
Meanwhile, Brio’s UK operation is painting a different picture. Sales grew 22 per cent in Q4 2008 compared to 2007. This year, the firm is already 13 per cent ahead of Jan/Feb 2008 despite being only mid-way through February.
Brio UK’s core railway line saw growth of 17 per cent in the fourth quarter and the toddler/baby toys grew almost 200 per cent. Nursery now forms almost 20 per cent of the firm’s UK business following its launch in September across a small, exclusive retailer base.