Profil:
Wittchen SAWittchen fashion retailer focuses on high-margin products, cutting inventory and expanding warehouse
Listed leather products manufacturer and fashion retailer Wittchen wants to focus on selling higher-margin products and will reduce its range of suitcases, which no longer generate such high margins. The company plans to modify its pricing and discount policy, announces a reduction in inventory levels and is preparing to launch a new investment in a warehouse, CFO Marcin Szygula told a conference.
Wittchen's key sales product is suitcases – in the first half of 2025, the share of suitcases in revenue fell to 51 percent from 55 percent a year earlier.
He said that the company is currently focusing on reviewing its product range.
The quarterly gross sales margin fell by 1.2 percentage points year on year to 60.9 percent in the second quarter. The company said that the results were affected by price pressure and strong competition (especially in the suitcase segment), which translated into lower sales profit.
"We want to focus a little on a different product range, slowly moving away from and reducing the range of suitcases. We also want to focus on pricing issues, so we are confident that ultimately our margin will be higher and will show an upward trend," said Szygula.
He said that cost pressure remains high and EBIT was under pressure from competitors. In the online channel, price pressure comes from Asian trading platforms.
"In terms of costs, I think that price pressure will slow down a little this year, so I think that costs will stabilise in 2026, and we will also carry out optimisation measures," said Szygula.
The company's inventories increased by 30 percent year on year, and in terms of square metres, they increased by 28 percent year on year.
"We are working on reducing inventory levels. On the one hand, this will improve cash flow and reduce credit liabilities, but it will also reduce logistics costs and allow us to purchase a new collection," said CFO.
He announced that the company plans to modify its pricing and discount policy.
"Until now, Wittchen has been known for large discounts and sales of up to 70 percent off. Very few people bought at the original price. We want to change that and lower those original prices. Ultimately, the discounts will be smaller," said Szygula.
He announced that preparations for a new investment are underway.
"We plan to complete the hall in 2027. This will also allow us to reduce logistics costs. We estimate that the investment costs will be around PLN 30 million and the return on this investment will be around six to seven years," he added.
Wittchen is present on 34 marketplace platforms in 23 European countries. It has its own online stores in eight countries.
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