1. business and industrial

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ANN
MACINTOSH RETAIL GROUP
RETAIL IS OUR BUSINESS
Style & Quality
Should different interpretations arise between the Dutch
and English version of this Annual Report, the Dutch version prevails.
This annual report may include rounding differences with
figures previously published, or between figures in the
Report of the Managing Board and those in the financial
statements.
In this annual report the company name Macintosh Retail
Group NV is abbreviated to Macintosh.
RETAIL IS OUR BUSINESS
TABLE OF CONTENTS
2
Message from the CEO
6
Strategy
8
8
10
12
14
18
30
32
34
36
40
Report of the Managing Board
Summary of 2014
Market developments
Number of shops
Increase in sales and market share at
Fashion and Kwantum
Results
Employees and organisation
Outlook for 2015
Sustainable business practices
Risk and risk management
Governance and responsibility statement
42
51
Report of the Supervisory Board 2014
Supervisory Board data
52
Shareholder information
58
59
60
Managing Board, group executives and directors
Managing Board data
List of addresses
Macintosh Retail Group N.V.
Amerikalaan 100, 6199 AE
P.O. box 110, 6190 AC
Maastricht-Airport
The Netherlands
Tel. +31 43 328 07 80
Fax +31 43 325 70 30
[email protected]
www.macintosh.nl
MACINTOSH RETAIL GROUP
1
MESSAGE FROM THE CEO
MESSAGE FROM THE CEO
2014 was a year with cautious consumers but also a year in which Macintosh’s strategy
was redesigned, a refinancing operation was carried out with the support of major
shareholders, and two changes were made to the Managing Board. At the same time, we
also worked hard to strengthen our relationship with customers to ensure our retail
formats provide them with a distinctive experience based on convenience, service, trusted brands, excellent collections and customer knowledge. Progress was made in these
areas, although we still need to improve our performance in relation to shopping experience, product offering and cross-channel customer approach.
Increase in sales and market share at Fashion
In April, the “Rebalancing for Profitable Growth” strategy was adopted and discussed
with shareholders. This strategy and the new financing package formed the basis for
the future for Macintosh as a cross-channel retailer in Fashion. The ambition was
primarily to increase the appeal of the retail formats, introduce cross-channel innovations, ensure more appealing product offerings and improved stock availability, and
stepping up marketing efforts. This was aimed at winning customers on a structural
basis by breaking the vicious circle that used to exist, in which drastic cost cuts were
made in response to falling earnings, which weakened the retail formats at a time of
rapidly increasing global and online competition.
A wide range of operational, commercial and organisation measures were taken with
a view to increasing market share. At Fashion NL, sales increased by 7.7% and the
share of the shoe market rose by 1.6 percentage points. Sales at Fashion Belux were
down 1.4%, which was in line with the market, while
there was a clear upward trend at Fashion UK.
...WE WORKED HARD TO
STRENGTHEN OUR RELATIONSHIP WITH CUSTOMERS...
The 42.6% increase in online sales from Fashion,
which was significantly higher than the market average, confirms that the cross-channel approach
was the right choice. Fashion NL, which grew by
30.6% and is strongly represented in the important,
growing group of cross-channel customers, took
the lead in this customer approach.
Increase in sales at Fashion not reflected
sufficiently in earnings
Customers responded positively to our revamped
retail formats, resulting in sharp increases in sales
and an improvement in earnings up to the end of
August. However, during the last four months of
the year, which are traditionally important, the
weather was extremely mild, and as a consequence
the sales in autumn and winter fashion lagged a
long way behind expectations. Big promotional discounts were necessary in order to entice consumers to purchase shoes, which put pressure on sales
and margins.
The positive trend in earnings up to the end of
August was more than cancelled out in September,
October and November. Although the trend in
2
ANNUAL REPORT 2014
Kurt Staelens, CEO
MESSAGE FROM THE CEO
earnings in December was positive, “Underlying EBIT” from Fashion was down € 5.9
million compared to 2013.
NEW CONCEPT HIGHLIGHTS
MANFIELD’S QUALITY
At Fashion NL, the € 19.8 million increase in sales was not reflected in the underlying
earnings which fell by € 3.1 million compared to 2013. Discounts on the winter range
led to lower margins at Fashion BeLux, and it also had to contend with higher expenses due to capital expenditure on cross-channel activities, resulting in a € 5.0 million
fall in underlying earnings compared to 2013. Earnings at Fashion UK showed a clear
upward trend, following a number of years of moderate earnings, with underlying
earnings increasing by € 1.6 million, despite the repositioning of Jones to a serviceoriented format with fewer generic discounts, which had a short-lived negative effect.
Good performance by Kwantum
Kwantum gained a larger market share of the core wall, window and floor coverings
market. Turnover increased by € 10.1 million (up 5.6%) despite a stable home furnishing market (Statistics Netherlands: market down 0.1%). Consumers appreciated the
improved product offering, additional services (measuring, hanging, laying) and the
greatly expanded range of decoration articles. The increase in turnover and gross
margin as a percentage of turnover more than compensated for the slight rise in
expenses, and the “Underlying EBIT” achieved by Kwantum in 2014 came to € 3.5 million (2013: - € 0.1 million).
KWANTUM GAINED A LARGER
MARKET SHARE OF THE CORE
WALL, WINDOW AND FLOOR
COVERINGS MARKET
Net result and dividend
Macintosh’s “Underlying EBIT” was - € 15.4 million (2013: - € 13.7 million). The total
EBIT was - € 91.0 million and was € 85.5 mln lower than in 2013, mainly as a consequence of the amortisation of goodwill and intangible assets of Scapino (€ 54.6 million)
and the goodwill of Brantano BeLux (11.3 million). The net result was - € 101.6 million
(2013: - € 12.1 million).
In the refinancing deal, Macintosh reached agreement with its lenders that dividends
will be distributed only if the leverage ratio is structurally lower than 2. This condition
was not met in 2014, for which reason the Managing Board has decided, with the approval of the Supervisory Board, that there will be no distribution for 2014.
Financing and covenants
In 2014 Macintosh was successfully refinanced with the support of a number of major
shareholders, resulting in an increase in equity by a net amount of € 19.2 million, by
means of a fully subscribed share issue and the granting of a structured loan for € 20
million. Moreover, a borrowing facility for a total of € 140 million, consisting of a revolving tranche of € 125 million and a tranche of € 15 million to finance peaks in working
capital, was agreed with a consortium of banks. Further information is contained in the
financial statements. The financing documentation was completed in mid-2014.
The covenants were not assessed at year-end 2014. Given the results in 2014 and the
strategic decision taken after the reporting date to sell Fashion UK and Nea International, the structure and the level of the covenants made in the € 140 million bank
financing package will be adjusted in 2015.
Strategy further sharpened
The “Rebalancing for Profitable Growth” strategy which was adopted early in 2014
focuses mainly on strengthening the Fashion store formats in order to give customers
the retail experience they deserve.
MACINTOSH RETAIL GROUP
3
MESSAGE FROM THE CEO
In the fall of 2014, the strategy was fleshed out in transformation programmes that focus on format development, cross-channel
innovation and operational excellence (costs and margin). These programmes are designed to bring about improvements in
Fashion’s operational and financial performance. This will be based on upgrading formats such as Brantano BeLux and Scapino and
the roll-out of the successful new retail concepts of Manfield and Young Fashion (Invito, Pro and Steve Madden). Investments are
also necessary in order to optimise systems and processes, with a view to promoting cross-channel sales and the preferential
relationship with the customer. Other important aspects relate to vertical integration, including in-house product development for
private labels, and improving the end-to-end product process.
The strategy was further sharpened early in 2015 and it was decided to focus on Fashion Benelux. The sale of Fashion UK and Nea
International (production and wholesale of braces) will be started in 2015, as will the sale of Kwantum, which intention was already
announced in 2014. In the Benelux, Macintosh leads the market in Fashion and has national store coverage, so that the crosschannel strategy can be implemented as efficiently as possible with the available financial resources.
The proceeds from the sale of Kwantum, Fashion UK and Nea International will be used to free up resources for the execution of the
transformation programmes and capital expenditures at Fashion Benelux and to repay debts. However, the sale will also result in a
lower group turnover and affect EBIT and EBITDA.
The sales growth target set in early 2014 (CAGR of 3.5% to 4.5%) for the period from 2013 to 2017, combined with an underlying EBIT
margin in 2017 of at least 6% in Fashion, will be updated in 2016 after the sharpened strategy has been implemented.
Strengthening competitive position
At Fashion, economies of scale and synergies are essential in order to improve margins and be able to stand up to suppliers and the
wholesalers positioned between retailers and suppliers. Given the decline in the shoe market in the Netherlands and Belgium in
2014, Macintosh is actively looking for ways to structurally improve its competitive position in those countries. It is actively investigating opportunities for collaboration and consolidation with other parties, with a view to optimising the supply chain and achieving
product synergies, and opportunities in the area of format consolidation. This can be accomplished in various ways, for example by
means of collaboration between formats, by means of combining formats, or by means of vertical integration within the value chain.
Confidence
Although a number of economic indicators are on an upward trend, the shoe retail market not yet seems to really improve in 2015.
The best way that Macintosh can respond to this is by being relevant to consumers every time they are in the market for a new pair
of shoes. Distinctive products, excellent service, a distinctive shopping experience and a smart interaction between offline and
online retailing are key to this. We need to offer more in these areas than other retailers if we want to beat the competition and get
customers to spend their money at our tills.
Word of thanks
Om behalf of the Managing Board, I would like to thank all of our employees for their dedication and commitment to serving the
customer. I would like to express my appreciation to our customers for shopping at our stores, and can assure them that we will
continue to do our utmost to provide them with an even better shopping experience and higher level of service. Finally, I would like
to thank our shareholders for their confidence in us and for making the refinancing operation possible.
Maastricht-Airport, the Netherlands, March 18, 2015
Kurt Staelens, CEO
4
ANNUAL REPORT 2014
RETAIL IS OUR BUSINESS
MACINTOSH RETAIL GROUP
5
REPORT OF THE MANAGING BOARD
STRATEGY
Retailing: go where the customers are
Macintosh’s objective is to sell shoes to as many satisfied customers as possible, in the
most profitable way possible. As the customers of the future will shop around and
make purchases both online and offline, at the start of 2011 Macintosh opted for a
cross-channel strategy. This strategy is aimed at ensuring a combination of optimum
online solutions, recognisable and inspiring stores, and excellent fulfilment and services, in order to increase Macintosh’s share of the wallet of consumers.
Starting points
Conditions
Physical stores will continue to • The store is the place where immediate purchases are made and
play a dominant role in the
online purchases are collected.
consumer purchasing process. • Distinctive retail experience and perceived value.
• Service and a “wow” shopping experience.
The combination of physical
• Nationwide store coverage.
stores and online retailing
• Seamless interaction between offline and online retail in all sales
(cross-channel) is clearly
channels.
preferable to purely online
• Real-time stock availability (online and in stores).
retailing.
• Short lead-times for ‘click and collect’ service due to use of physical
infrastructure.
• Standardisation of back office systems and processes.
Strong retail brands are key.
• Clear brand proposition and value proposition (“brand pillars”).
• Distinctive products.
• Mix of international brands and private labels.
• Consistent marketing in all sales channels.
• Streamlined end-to-end product processes.
The purchasing behaviour of
• Multi-channel CRM and loyalty programmes.
customers varies, and custo-
• Knowledge of customer purchasing behaviour and preferences.
mers want to be approached on • Preselection in ranges.
the basis of their individual
preferences and requirements.
6
ANNUAL REPORT 2014
• Customised fulfilment.
REPORT OF THE MANAGING BOARD
The conclusions of the study into the strategy at Fashion were
made public at the General Meeting of Shareholders held in
April 2014. The main finding was that while the cross-channel
approach is the correct one, only those formats that have a
clear ability to stand out can be successful under such an
approach. A number of operational and commercial measures
were recommended in order to highlight the strength of the
shoe formats in the Netherlands, Belgium and the UK, and
these measures were incorporated in the group-wide Rebalancing for Profitable Growth programme, together with the
action items previously defined in 2013. This increased the
pace of the implementation of the strategy adopted in 2011,
which took as its starting point the transformation from a
traditional retail business into a cross-channel retailer.
The strategy was further fine-tuned at year-end 2014 to include transformation programmes focusing on format development, cross-channel innovation and operational excellence
(costs and margin).
1
Retail formats
2
Cross-channel
3
Processes
Format rebranding
Above-the-line pillars
Real-time full stock view
(online and in-store)
Own product development and
supplier concentration
+ € 10 shop concept
3h free click & collect
Implementation of UK endto-end processes in Benelux
with better purchasing
conditions, pricing and margin
management
International brands layer
6h click & deliver
Rent negotiations
High performance store
programme
3D perfect fit
Synergies in Benelux
distribution centres
Multi-channel CRM and less
markdown
Standardisation of back office,
cross-channel/CRM
MACINTOSH RETAIL GROUP
7
REPORT OF THE MANAGING BOARD
SUMMARY OF 2014
Fashion:
• Higher sales despite difficult shoe markets. Dutch shoe market fell by 2.1% and
Belgian market by 0.3%, while UK market rose by 1.7%.
• Fashion NL increased its share of the shoe market to 13.7% thanks to a € 19.8
million increase in sales (+ 7.7%).
• Total sales at Fashion increased € 38.4 million (+ 6.0%). Offline sales rose by
3.4%, and online sales by 42.6%.
•“Underlying1 EBIT” from Fashion fell € 5.9 million compared with 2013, owing to
poor sales in the months of September, October and November.
• Impairment of goodwill and intangible assets of € 54.6 million at Scapino, and
impairment of goodwill of € 11.3 million at Brantano BeLux.
Living:
• Home decoration market started to recover in Q3 2014, but was virtually stable for
2014 as a whole (- 0.1%).
• Kwantum gained a larger share of the core wall, floor and window coverings
markets, and saw turnover increase by € 10.1 million (+ 5.6%).
•“Underlying1 EBIT” from Kwantum rose € 3.6 million.
Macintosh:
•“Underlying2 EBIT” of Macintosh fell € 1.7 million compared with 2013 (- € 13.7
million).
• EBIT 2014 was negatively influenced by € 75.6 million, due to specific items, the
most important of which related to the impairment of goodwill and intangible
assets at Fashion (- € 65.9 million).
• Net loss of € 101.6 million (2013: net loss of € 12.1 million).
• Net debt increased by € 24.2 million to € 69.8 million due to a fall in EBIT and an
increase in working capital (mainly stock).
1.
2.
Underlying operating EBIT is EBIT exclusive of other operating income and non-recurring gains/losses.
In 2013, total underlying operating EBIT was equal to EBIT exclusive of exceptional items (- € 1.0 million) less income of € 4.3
million related to retail leasing transactions and net income of € 8.4 million attributable to other income and non-recurring
gains/losses, including the release of provisions related primarily to employee benefits at Living (€ 3.0 million) and the sale
of real estate (€ 2.4 million). The remaining € 3.0 million mostly relates to the release (partial or otherwise) of reserves.
SALES BY SECTOR
LIVING
In € millions 2014
2013
FASHI0N
In € millions 2014
2013
687.7
640.3
TOTAL SALES
In € millions 2014: 870.6
8
ANNUAL REPORT 2014
2013: 822.1
191.9
181.8
RETAIL IS OUR
BUSINESS
REPORT OF THE MANAGING BOARD
Style & Quality
KEY FIGURES
(In € millions)
2014
2013
Net sales Fashion
678.7
640.3
Net sales Living
191.9
181.8
4.9
7.4
- 12.1
- 6.1
3.5
- 0.1
Total underlying EBIT
- 15.4
- 13.7
EBIT
- 91.0
- 5.5
- 101.6
- 12.1
Underlying EBITDA
Underlying EBIT Fashion
Underlying EBIT Living
Net result
Equity
117.4
(28.5%)
194.4
(39.4%)
Fashion
Living
Fashion
Living
Number of stores at year-end
8801
1072
9041
1092
Number of FTEs3 at year-end
4,663
1,005
4,682
995
1. Of which 786 core and 94 non-core (2013: 759 core and 145 non-core).
2. Of which 97 core and 10 non-core (2013: 96 core and 13 non-core).
3. Exclusive of holding, Macintosh Hong Kong and Macintosh Intragroup Services.
MACINTOSH RETAIL GROUP
9
REPORT OF THE MANAGING BOARD
MARKET DEVELOPMENTS
Market developments
During the first half of 2014 there was a recovery in consumer confidence and willingness to buy in the
Netherlands. This was followed by a decline in both of these indicators as from the start of the second
half of the year. Consumer confidence fell in Belgium but rose in the UK, where it stabilised in the last
months of the year.
CONSUMER CONFIDENCE
Index
20
10
Consumer confidence NL
0
Willingness to buy NL
Consumer confidence B
-10
Consumer confidence UK
-20
-30
-40
-50
feb-13
aug-13
feb-14
aug-14
feb-15
Source: Statistics Netherlands (CBS) and Eurostat (for Belgium and UK)
The persistently poor economic climate, the lack of consumer confidence and the low willingness
to buy were reflected in a stabilization in non-food retail spending (up 0.1%), which was due to an
increase in volumes (up 1.0%) and a fall in prices (down 0.9%). This comes after a 4.7% fall in nonfood spending in 2013.
SALES FROM FASHION CORE VS. MARKET
Sales from Fashion core1 vs. market
Shoes, exclusive of clothing,
accessories, etc.
The Netherlands2
Market
Macintosh
Belgium2
Market
Macintosh
UK2
Market
Macintosh
Value
Total
- 2.1%
14.3%
-0.3%
0.3%
1.7%
6.1%
Volume
Total
- 2.3%
10.7%
- 1.9%
- 1.5%
- 0.5%
0.2%
Price
Total
0.2%
3.3%
1.6%
1.8%
2.1%
5.8%
Value
Offline
- 5.8%
12.1%
- 4.2%
- 0.5%
- 0.4%
5.0%
Value
Online
21.9%
39.5%
42.5%
28.5%
8.7%
29.6%
1 This relates to core activities and shoes only; figures do not match turnover figures disclosed elsewhere in this press release, which are based on total turnover.
2 Macintosh figures at aggregate level are comparable with market sources on a one-on-one basis, but the division between online/offline is not. Market figures NL and B: GfK; UK: Kantar.
The shoe market in the Netherlands was under pressure, falling by 2.1% due to lower sales volumes. Fashion NL outperformed the market, rising 14.3% thanks to a 10.7% increase in volumes
compared to the market and to higher prices (up 3.3%). It also performed much better than the
market in terms of online sales, which rose by 39.5%.
In Belgium, the market fell a slight 0.3% compared with 2013, owing to declining volumes. In terms
of sales, Fashion BeLux slightly outperformed the market, with fewer shoes being sold (down 1.5%)
but at higher prices (up 1.8%). Online sales were up 28.5%, which is lower than the market as a
whole.
Fashion UK also outperformed the market in terms of sales (primarily due to higher prices), including in the area of online sales.
The home furnishing market contracted by 0.1% according to Statistics Netherlands (CBS), owing to
lower average prices.
10
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
BRANTANO BELUX: 20,000 PRODUCTS IN EVERY SHOP
Brantano offers price-conscious consumers a varied selection of
shoes, casual wear, bags, suitcases and accessories. The products on
offer range from basic lines to international brands. Each Brantano
shop boasts a 3D foot scan to determine foot and shoe size, which are
recorded on the customer’s Brantano card. It is also possible to create
a projection of children’s growth over the coming months. All
items sold in-store at Brantano are also available via the
online shop.
139
stores in
Belgium and Luxembourg
1,070
employees
Follow on:
brantano.be
MACINTOSH RETAIL GROUP
11
REPORT OF THE MANAGING BOARD
NUMBER OF STORES
Total number of stores down 26 to 987
Fashion opened 48 stores in 2014, the majority of which were 25 concessions in the UK. A total of 75 stores were closed or sold, including 12 non-core stores at Fashion NL and 27 non-core Scapino stores in Belgium (24 sold, three closed). Most other closures were at
Fashion UK (ten Brantano stores and four Jones stores). The total number of stores at Fashion fell from 904 at the end of 2013 to 880
at year-end 2014. Kwantum closed three stores and opened one.
The retail floor space at Fashion fell by 26,800 m² to 377,700 m² at Fashion, and by 4,200 m2 to 230,800 m2 at Living.
Countries
Fashion Belux
Brantano
Fashion NL
Scapino High street
1
Fashion UK
2
Scapino
Brantano
3
Living
Jones Kwantum NL Kwantum B
Bootmaker3
YE 2014
139
0
233
204
179
125
98
9
YE 2013
138
27
245
210
165
119
100
9
YE 2014
103,400
0
26,400
153,600
82,700
11,600
221,800
9,000
YE 2013
103,300
20,100
27,300
158,300
84,200
11,200
225,600
9,500
M2
1. Including 5 stores in Luxembourg, 3 Firelle stores in Belgium and 1 Jones store in Belgium.
2. Consisting of Dolcis (89, including 6 outlet stores), Invito (40), Manfield (69), PRO 0031 (32) and Steve Madden (3).
3. Including 33 concessions at Brantano and 13 concessions at Jones Bootmaker.
Solution for 52 non-core stores
Non-strategic, structurally loss-making stores are closed as soon as possible, and by the next lease expiration date at the latest,
unless an alternative solution is found for the store in question. In each case, the cash effects of allowing the lease to run its full term
are weight up against the costs of buying off contractual rental commitments. The assets of these stores were impaired and a provision was formed to cover the present value of future losses. This implies that the provision is used to offset the losses of such
stores in the income statement. The full effect of the negative contribution to profit of the stores in question is, however, seen in cash
flows from operating activities.
In 2014, a permanent solution was found for 52 non-core stores. A temporary solution, based on rent reductions or the transformation of stores into another format or outlet centres, was found for 10 non-core stores in 2014. The stores for which a temporary solution was found will be kept on the list of non-core stores with the aim of terminating the leases at the earliest possible moment.
Permanent solution found
Temporary solution found; still non-core
Non-core stores
at year-end 2014
Closed / sold1
Rent reduction/
other solution2
Rent reduction/
other solution
Outlet store
47
2
4
6
96
3
-
-
-
10
Fashion
Living
Total
52
10
106
1. Including 27 stores at Scapino Belgium.
2. These stores qualify are core stores again.
Improving rental conditions for core stores
The store portfolio is not only optimised by finding solutions for non-core stores, but also by increasing the contribution by core
stores. Similar to 2013, arrangements were made about rent reductions and early break options were agreed in 2014 for stores
where Macintosh has negotiating clout. On balance, reductions amounted to € 0.9 million in 2014, which amount was added to the
rent reduction of 2013 (€ 0.8 million). The reductions in 2014 were mainly achieved at Fashion NL and Living, while rents at Fashion
UK and Fashion BeLux were virtually stable. Lessors are also increasingly willing, especially in the UK, to share in the capital
expenditure that is needed to continue an existing store or open a new one.
12
ANNUAL REPORT 2014
BRANTANO UK: SHOES FOR THE WHOLE FAMILY
REPORT OF THE MANAGING BOARD
For UK consumers, Brantano is the place to find a wide
and varied assortment - from basic ranges to leading
brands such as Clarks, Skechers, Hush Puppies, Rieker,
Start Rite, Adidas and Nike. Brantano shop assistants
are fully trained to measure feet and fit shoes, affording
the shoe shop its reputation as the best for growing feet.
Brantano has 179 shops spread across the UK, including
shops-in-shops. Brantano offers its customers numerous shopping channels: in-store, online, mobile and
click & collect.
179
stores in
the United Kingdom
2,013
employees
Follow on:
brantano.co.uk
MACINTOSH RETAIL GROUP
13
REPORT OF THE MANAGING BOARD
INCREASE IN SALES AND MARKET SHARE AT
FASHION AND KWANTUM
• Increase in sales from Fashion by
Sales up € 48.5 million (+ 5.9%)
€ 38.4 million (+ 6.0%); offline +
Consumer sales (inclusive of VAT) amounted to € 1,038.3 million in 2014 (2013: € 976.4
million). Of total sales, 53.1% was generated in the Netherlands, 18.9% in the BeLux
3.4% and online + 42.6%.
• Fashion NL strengthens position in
and 26.8% in the UK.
falling market and increases market
Net sales for 2014 were up 5.9% compared to the previous year, and stood at € 870.6
share. Significant growth also at
million. Of total sales, € 64.8 million was generated by online sales. This represents an
Fashion UK. Performance of Fashion
increase of 41.3%, which was mostly attributable to Fashion NL and Fashion UK.
BeLux in line with market.
The 7.6% increase in sales at Fashion for the first three quarters of 2014 was tempered
• Sales from Kwantum (Living) in-
by a slowdown in growth in the fourth quarter (+ 2.0%). Kwantum performed better in
the last two quarters than in the first half of the year.
creased € 10.1 million (+ 5.6%) in a
home furnishing market that has
Fashion NL
seen recovery since Q3.
In 2014, Fashion NL gave top priority to increasing turnover and market share, while
making advance allowance for a reduction in footfall seen in the high street. Its activi-
SALES PER QUARTER
Q1
(in € millions)
Q2
Q3
Q4
2014
2013
%
2014
2013
%
2014
2013
%
2014
2013
%
139.3
129.4
+ 7.6
176.5
157.4
+ 12.1
176.5
170.8
+ 3.4
186.4
182.7
+ 2.0
Living
45.1
48.3
- 6.6
44.5
44.5
- 0.1
47.2
42.5
+ 10.9
55.1
46.4
+ 18.7
Total
184.4
177.7
+ 3.8
221.0
201.9
+ 9.4
223.7
213.3
+ 4.9
241.5
229.2
+ 5.4
Fashion
SALES BY SECTORS AND COUNTRIES
Total
(in € millions)
Offline
Online
2014
2013
%
2014
2013
%
2014
2013
Fashion NL
278.8
259.0
+ 7.7
242.7
231.3
+ 4.9
36.1
27.7 + 30.6
Fashion BeLux
151.8
153.9
- 1.4
147.0
150.1
- 2.1
4.8
3.8 + 27.1
232.71
212.7
+ 9.4
213.2
201.7
+ 5.8
19.5
11.0 + 76.7
15.4
Fashion UK
Fashion Other
%
14.7
+ 4.4
14.6
14.2
+ 2.4
0.8
0.5 + 70.1
1
640.3
+ 6.0
617.5
597.3
+ 3.4
61.2
43.0 + 42.6
Living
191.9
181.8
+ 5.6
188.3
178.9
+ 5.3
3.6
2.9 + 23.4
Total
870.6
822.1
+ 5.9
805.8
776.2
+ 3.8
64.8
45.9 + 41.3
Fashion total
678.7
1. Including positive currency effect of € 11.1 million.
INTRODUCTION
IMPREGNATION SERVICE
AT MANFIELD AND DOLCIS
ties were therefore aimed primarily at making the shoe formats more appealing, and
were tailored to each format. The key concepts in this respect were more appealing
product ranges, greater stock availability, the introduction of store differentiators (such
as the impregnation service at Manfield and Dolcis), and the training of store personnel. A great deal of energy was also put into the offline and online communication of
the proposition of the shoe formats to shoppers, based on a marketing budget that was
increased for this specific purpose.
Sales at Fashion NL increased by € 19.8 million (+ 7.7%), despite a considerable fall in
clothing sales at Scapino. There was a clear increase in the market share of Fashion
NL (+ 1.6 percentage points in shoes). Another important area of focus concerned the
further expansion of the cross-channel position. Fashion NL has a significant share of
Dutch cross-channel customers, and saw online sales increase by 30.6% to € 36.1
14
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
COMFORT & STYLE
Women, men and children alike will discover an extensive shoe collection in line with the latest fashions at
Dolcis. The collection offers comfortable yet stylish fashion for all the family, proving that quality and comfort
can go hand-in-hand with current trends. Both adults
and children can expect personal, tailor-made advice.
When purchasing online at Dolcis.nl, customers can
opt for home delivery, collection from a Dolcis store or
collection from an Intreza Shoepoint, where they will
receive professional advice.
89
stores
(outlet stores
included)
764 employees
dolcis.nl
Follow on:
MACINTOSH RETAIL GROUP
15
REPORT OF THE MANAGING BOARD
INTRODUCTION YOUNG FASHION
STORE CONCEPT, (INVITO, PRO
AND STEVE MADDEN UNDER ONE
ROOF)
million. It therefore significantly outperformed the
Dutch online market as a whole (+ 21.9%). Today, online sales account for 13.0% of total turnover from
Fashion NL. At Fashion Other (mostly Nea International), sales rose by € 0.7 million.
All shoe formats in the Netherlands saw an increase
in sales. The new store concept of Manfield and Young
Fashion (Invito, PRO0031 and Steve Madden under
one roof) was introduced successfully, as a result of
which the sales of the revamped stores increased by
over 30% and almost 20%, respectively, compared to
the same stores in 2013. Sales also increased at
Dolcis (+ 4.2%), where 46 stores have now introduced the Dolcis 3.0 concept. Scapino had to
contend with a significant fall in clothing sales (- 8.2%) in addition to the difficult shoe market.
Improvements were made to the range of shoes (more leather) without increasing selling prices,
and these improvements, in combination with greater marketing efforts, contributed to the 4.9%
rise in the number of pairs of shoes sold compared to 2013.
At Nea International, which sells orthopaedic braces to medical wholesalers and the sports sector,
sales continued to rise and were up 8.4% compared to the previous year.
Fashion BeLux
Sales from Fashion BeLux fell by € 2.1 million (- 1.4%), partly as a result of the sale of the 24 Scapino
stores at the start of November. The most important format, Brantano, saw a drop in footfall in a
market that fell by 0.3% in 2014. That said, it did hold on to its position as the market leader in the
offline shoe market. At Fashion BeLux, online turnover was up 27.1%
The 3D foot measuring service of Brantano BeLux has been fully implemented, providing Brantano
with a strong tool for building upon the preferential relationship with the customer. There are now
over 110,000 active holders of 3D foot passports, who have a higher ticket per sale of some 25%. An
added advantage of the foot passport is that the percentage of returns of online purchases has
dropped from about 25% to approximately 15% for these customers.
Sales at Firelle, which has three stores and sells shoes, clothing and accessories, were 15.2% lower
than in 2013.
Fashion UK
Sales at Fashion UK increased by € 20.0 million (+ 9.4%; exclusive of currency effects: + 4.0%),
thanks to increased sales at both Brantano and Jones Bootmaker. Fashion UK performed better
than the market in terms of online sales, which rose by 76.7%.
Brantano UK had one of its best years on record, with sales increasing by 11.9% (exclusive of currency effects: + 6.7%). This increase was a result of expansion (20 concessions with flexible cost
structures and 2 new own stores), higher sales conversion rates and higher average prices due to
the improved portfolio of brands. Jones Bootmaker experienced a slowdown in growth (+ 6.8%;
exclusive of currency effects: + 1.6%), which was partly attributable to its decision to reduce the use
of promotional discounts in order to focus more on the brand image.
Kwantum (Living)
The home furnishing market started to recover in Q3, and at Living sales for the year as a whole
increased by € 10.1 million (+ 5.6%) compared to 2013, despite the closure of three stores in 2014.
This increase in sales was primarily down to greater footfall and higher sales conversion rates. The
greatest increase in sales was seen in the floor and window covering, furniture and furnishing
product groups, and was the result of new articles being added to the collection and a new store
presentation.
16
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
INTREZA
Orders placed before 10pm
will be available the next day.
The intreza.nl service covers
over 400 Shoepoints where
shoes bought online can be
tried on and collected at the customer’s
convenience.
Intreza.nl is Macintosh’s umbrella shoe
platform with a range of women’s, men’s
and children’s shoes available online. As
well as collections by famous brands such
as Dolcis, Scapino, Invito, Manfield, PRO
and Steve Madden, intreza.nl also brings
consumers many other well-known shoe
brands. As such, intreza.nl represents a
platform which makes it easy to find, compare, reserve and order shoes.
A new intreza.nl feature also tells shoppers
which outlet and which store stocks their
chosen shoes. The customer can then try
on and pay for the shoes at that location.
intreza.nl
MACINTOSH RETAIL GROUP
17
REPORT OF THE MANAGING BOARD
RESULTS
• “Underlying EBIT” - € 15.4 million (2013: - € 13.7 million).
• “Underlying EBIT” from Fashion down € 6.0 million to - € 12.1 mil
lion due to pressure on margins and higher costs.
• The increase in earnings from Fashion in the first eight months
(“Underlying EBIT” + € 3.6 million) was more than cancelled out
in September through December by the unseasonably warm
autumn (“Underlying EBIT” for full year 2014 was - € 5.9 mil-
lion).
• Underlying EBIT from Kwantum increased with € 3.6 million to
€ 3.5 million.
• Exceptional items of - € 80.6 million, mainly due to the non-cash
amortisation of goodwill and intangible assets at Fashion.
The progression from reported EBIT to “Underlying EBIT” is shown in the
table on page 22.
Margins at Fashion under pressure but rise at Living
The gross margin as a percentage of turnover was 0.9 percentage points lower in
2014 than in the previous year, due to the net effect of a 1.7 percentage point fall in
the margin as a percentage of sales at Fashion and a 1.3 percentage point increase
at Living.
In all countries where Fashion operates, margins were under pressure owing to
discounts on the winter range due to the extremely warm weather. Moreover, in the
Dutch market there were more promotional discounts and price reductions, partly
as a result of clearance and closing-down sales. At Fashion BeLux, too, the gross
margin as a percentage of turnover was lower than in 2013 due to promotional discounts, whereas Fashion UK was less affected by pressure on margins because of
its sophisticated end-to-end product process and margin management.
Kwantum improved its gross margin as a percentage of sales thanks to higher
product margins and the restriction of promotional discounts, which resulted in a
market increase in the absolute gross margin compared to 2013.
Increase in expenses, mainly due to measures aimed at increasing market share
at Fashion
Total expenses increased by € 25.6 million in 2014, € 6.1 million of which was attributable to currency effects. Disregarding currency effects, expenses were up € 19.5
million due to the following main factors:
• Additional offline and online marketing expenses related to activities aimed at
structurally increasing market share (€ 4.8 million).
• A higher employee benefits expense for stores (€ 3.5 million), chiefly because of
higher sales and expansion (in the UK).
• An increase in logistical expenses (€ 1.9 million) and e-commerce-related costs
(€ 1.5 million) associated with higher sales.
• A higher employee benefits expense (€ 1.4 million), chiefly because of new hires
at Fashion NL.
• Lower operating income (€ 7.6 million) due to rental transactions.
Other factors, the principal one being lower depreciations, resulted in the above
mentioned increase.
18
ANNUAL REPORT 2014
INVITO: THE LATEST FASHION AT THE
RIGHT PRICE!
Invito is the chosen outlet of fashion addicts. As well as trendy shoes, fashionistas
also find fashionable bags and accessories.
Invito translates international trends into
fashionable items at acceptable Dutch
prices. In addition to an inspiring women’s
collection, Invito also offers a collection for
men with a sense of style, including various
big-brand sneakers, boots, loafers and stylish shoes.
Invito is 24/7 spot-on fashion! The full range
can also be found in Invito’s web shop, as
well as at intreza.nl.
invito.com
Follow on:
40
stores
in the Netherlands at
top locations
371 employees
MACINTOSH RETAIL GROUP
19
REPORT OF THE MANAGING BOARD
“Underlying EBIT” down € 1.7 million
This report refers to “Underlying EBIT”, which is equal to EBIT less incidental items,
because it offers the best understanding of the underlying developments in earnings.
Restated for these one-off effects, “Underlying EBIT” stood at € 15.4 million negative
in 2014, which represents a drop by € 1.7 million on 2013 (€ 13.7 million negative).
“UNDERLYING EBIT”
Full year
(in € millions)
First half
Second half
2014
2013
2014
2013
2014
2013
- 12.1
- 6.1
- 12.3
- 16.2
0.2
10.0
Living
3.5
- 0.1
- 0.1
- 0.7
3.6
0.6
Other
- 6.8
- 7.5
- 3.9
- 4.0
- 2.9
- 3.5
- 15.4
-13.7
- 16.3
- 20.9
0.9
7.2
Fashion
Total
1
1. Any group expenses not directly attributable to the segments.
Normally speaking, all of Fashion’s results are realised in the last few months of the
year, thereby amply offsetting any losses traditionally suffered over the first half of the
year. This was not the case in 2014, however. “Underlying EBIT” from Fashion grew by
€ 3.6 million up to the end of August, thanks to a marked increase in sales (+ 9.4%).
Sales were lower in September, October and November (- 0.1%). Costs associated with
additional measures to support sales, especially at Fashion NL, in combination with
the additional pressure on margins caused by having to sell winter inventories at less
than the planned selling price, meant that the increase in earnings seen at Fashion up
to the end of August was more than cancelled out in the months of September, October
and November. As a result, “Underlying EBIT” for the whole of 2014 fell by € 6.0 million
compared with 2013 (- € 6.1 million). If the weather in the autumn had been normal,
“Underlying EBIT” would have been con-
IN 2014 NEA INTERNATIONAL
INTRODUCES A NEW LEATHER
INSOLE
siderably higher.
“Underlying EBIT” at Fashion NL and
Fashion BeLux was down compared to
2013. By contrast, Fashion UK and Nea
International saw “Underlying EBIT”
increase.
At Kwantum, “Underlying EBIT” increased by € 3.6 million to € 3.5 million, compared to an “Underlying EBIT” of - € 0.1
million in 2013, thanks to the € 10.1
million increase in sales and higher
margin in percentage terms, which more
than offset the increase in cost levels.
Follow on:
20
ANNUAL REPORT 2014
JONES BOOTMAKER: TRADITIONAL BRITISH QUALITY
With 125 shops at top locations in cities and shopping centres throughout the UK, Jones Bootmaker has grown over 150 years to become a
prominent shoe shop chain. In addition to its own distinctive collections, Jones also stocks renowned brands such as Timberland, Gabor
and Barkers. Jones Bootmaker’s excellent reputation - in 2010 it was
voted best shoe retailer in the UK – has led to cooperation with the
well-known British department store chain, House of Fraser, and the
opening of various franchises.
125
stores in
the United Kingdom
1,460
employees
jonesbootmaker.com
MACINTOSH RETAIL GROUP
21
REPORT OF THE MANAGING BOARD
Bridge from “Underlying EBIT” to reported EBIT
Total EBIT for 2014 was - € 91.0 million (2013: - € 5.5 million), while “Underlying EBIT” landed at - € 15.4
million (2013: - € 13.7 million). The table below shows the progression from total EBIT to “Underlying EBIT”.
EBIT
2014
(in €
millions)
Reported
Lease
transactions
Nonrecurring
Other
Underlying
- 30.2
- 1.2
21.31
- 2.0
- 12.1
Living
6.8
-
- 1.2
- 2.1
Other
- 67.6
1.1
60.5
3
Total
- 91.0
- 0.1
80.6
Fashion
2
2013
Difference
compared to
underlying
Underlying
Other
- 6.0
- 6.1
- 2.8
2.8
- 4.6
- 1.6
3.5
3.6
- 0.1
- 2.5
0.0
0.0
2.4
- 0.8
- 6.8
0.7
- 7.5
- 0.4
1.7
- 2.5
- 6.3
- 4.9
- 15.4
- 1.7
- 13.7
- 5.6
4.5
- 7.1
- 5.5
1. Including amortisation of trade mark Scapino (€ 6.4 million)
2. Any group expenses not directly attributable to the segments
NonLease
recurring transactions
3. Amortisation of goodwill Scapino and Brantano BeLux
Normalisations were as follows:
• Rental transactions
-2014: a loss of € 0.1 million on balance on the disposal of tenancy agreements at Fashion (€ 1.2
million) and a loss of € 1.1 million on the sale of properties (HQ/DC Halfords);
- 2013: a plus of € 7.1 million, € 4.6 million of which related to fees for the disposal of tenancy agree-
ments at Fashion NL and Fashion UK in particular, and € 2.5 million was associated with the sale of
freehold retail properties.
• Incidental items of € 80.6 million in total in 2014, consisting mainly of:
- Impairment of goodwill and brand name of Scapino (€ 54.6 million) and goodwill of Brantano BeLux
(€ 11.3 million);
-An impairment on assets (€ 7.0 million) and an allocation of € 6.8 million to the provision for
loss-making stores, both mainly in the context of the programme of store closures.
As a result of the reporting structures, the amounts in question were spread across the different
segments. In 2013, incidental items stood at € 4.5 million, which was primarily attributable to
integration expenses at Fashion UK and Fashion NL.
•Other
- 2014: € 4.9 million mainly concerned various released reserves at Living (€ 2.0 million) and a release
of a provision for acquisition risks (€ 1.5 million) and proceeds from sublets (€ 0.7 million).
- 2013: € 5.6 million mainly concerned various released reserves at Living (€ 3.0 million) and Fashion
(€ 1.1 million) and proceeds from sublets (€ 0.5 million).
Impairment at Scapino and Brantano BeLux
Macintosh acquired Scapino and Brantano in 2006 and 2008, respectively, and paid goodwill for them at
that time. At year-end 2013, the amount of goodwill included on the balance sheet was € 48.2 million and
€ 50.7 million respectively. In the context of the contraction of the Dutch and Belgian shoe markets in
recent years, the future cash flows from both formats were reassessed, taking into account required
future investments in areas such as stores, the cross-channel approach to customers and inventories.
This led to new insights regarding the valuation of Scapino’s goodwill and assets, as a result of which
Macintosh was required to write off the goodwill (€ 48.2 million) and the capitalised brand name Scapino
(€ 6.4 million) in full in 2014. A write-off of goodwill amounting to € 11.3 million was included for Brantano.
No cash outflow was involved in either of these exercises.
Macintosh remains convinced of the future opportunities that exist for Scapino and Brantano, and these
formats are important corner stones in our strategy. Scapino will once again be strongly positioned in the
market as a store that offers top-brand quality at the lowest prices, and the Brantano format will be
comprehensively upgraded to make it Belgium’s best shoe store for the whole family.
22
ANNUAL REPORT 2014
Reported
REPORT OF THE MANAGING BOARD
YOU’RE BETTER OFF WITH KWANTUM
Kwantum is the largest homeware discount store in the Netherlands and Flanders, and the market leader in the product categories floor coverings, laminate, curtains, wallpaper and lighting.
The exceptionally comprehensive, modern and low-priced collection comes with excellent services – from making curtains and
blinds to laying floor coverings. Furthermore, Kwantum is one
of the largest providers of seasonal items, such as garden furniture. The home furnishings line is gaining ground both on the
shop floor and in the web shop. Environmental responsibility and
quality production that has little or no impact on the environment
has been a key consideration in Kwantum’s business operations
for many years now.
98
stores
in Belgium
1,582
employees in 46
employees
the Netherlands
kwantum.nl kwantum.be
9
stores in the Netherlands
in Belgium
MACINTOSH RETAIL GROUP
23
REPORT OF THE MANAGING BOARD
Net result
Interests were € 2.3 million higher than in 2013 because of a higher interest rate as a result of the
refinancing and because of higher financing requirements. In addition, net finance costs included the
transaction loss on the sale of Scapino Belgium (€ 2.4 million) as well as the write-off of € 1.1 million
on the € 6.4 million loan to Halfords because of the insolvency of that company. Net finance costs landed
at € 10.4 million (2013: € 4.2 million).
The effective tax rate was 0.2% (2013: 14.0%).
Total net result can be broken down as follows:
NET RESULT
Full year
(in € millions)
Net result on continuing operations
Second half
2014
2013
2014
2013
2014
2013
- 101.6
- 8.3
- 31,2
- 13.2
- 70.4
4.9
-
- 3.8
-
- 4.1
-
0.3
- 101.6
- 12.1
- 31,2
- 17.3
- 70.4
5.2
Net result on discontinued operations1
Net result
First half
1. 2013: Halfords.
The Managing Board will propose to shareholders, in accordance with Article 33(4) of the Articles of
Association, that the net loss for 2014 of € 101.6 million be charged to the distributable portion of
equity.
Group balance sheet and solvency
The balance sheet total at year-end 2014 stood at € 411.8 million, which was
€ 81.6 million lower than at year-end 2013. The fall was chiefly due to the
amortisation of goodwill and intangible assets related to Scapino and
Brantano. Equity fell by € 77.1 million to € 117.4 million. The issue
of new shares in July 2014, which increased the number of
shares by 10%, had a net positive effect of € 19.2 million. The
solvency ratio stood at 28.5% (2013: 39.4%).
2014
2013
Total assets (in € millions)
411.8
493.5
Equity (in € millions)
117.4
194.4
28.5
39.4
Solvency ratio
EBITDA, cash flows from operating activities and capital
expenditure
Total EBITDA (earnings before interest, tax, depreciation and amortisation) stood at € 0.2 million (2013: € 15.9 million), while underlying
EBITDA amounted to € 4.9 million (2013: € 7.4 million).
EBITDA
2014
(in € millions)
Underlying EBIT
Depreciation and amortisation
Underlying EBITDA
24
ANNUAL REPORT 2014
2013
Total
Fashion
Living
Other
Total
Fashion
Living
Other
- 15.4
-12.1
3.5
- 6.8
- 13.7
- 6.1
- 0.1
- 7.5
20.3
16.5
2.7
1.1
21.1
17.1
3.0
1.0
4.9
4.4
6.2
- 5.7
7.4
10.9
2.9
- 6.5
REPORT OF THE MANAGING BOARD
MANFIELD, A PASSION FOR SHOES
Manfield is known for its highly varied and fashionable women’s and men’s shoe collection of
outstanding quality. Fashion-conscious men
and women can find stylish and comfortable
shoes for all occasions at Manfield. A stunning
collection of bags and accessories completes
the Manfield product range.
The Manfield collection is also available online.
Purchases can be delivered to the home or to an
Intreza Shoepoint.
69
Style & Quality
stores
in the Netherlands at
top locations
620 employees
manfield.com
Follow on:
MACINTOSH RETAIL GROUP
25
REPORT OF THE MANAGING BOARD
The table below shows a condensed breakdown of cash flows from operating activities:
CASH FLOW STATEMENT
2014
2013
Difference
- 91.0
- 5.5
- 85.5
91.2
21.5
69.8
0.2
15.9
- 15.7
- 13.0
4.1
- 17.2
- 5.1
- 11.8
6.7
Capital expenditure
- 16.5
- 12.4
- 4.1
Cash flow from operating activities
- 34.4
- 4.2
- 30.2
(in € millions)
EBIT
Depreciation and amortisation
EBITDA
Movements in working capital
Movements in provisions
Cash flows from operating activities fell by € 30.2 million against 2013 due primarily to
lower earnings and higher working capital. The item movements in provisions was
lower because of the change in/allocation of € 6.8 million to the provision for lossmaking stores in 2014. Although the cash-out effect of the loss-making stores was not
substantially lower, this was still partially reflected in earnings in 2014.
Capitalised capital expenditure stood at € 16.5 million, which was a € 4.1 million
increase on last year. Capital expenditure can be broken down as follows:
CAPITAL EXPENDITURE
2014
2013
New stores
3,0
2,7
Existing stores
7,4
4,9
Logistics and information systems
5,7
4,0
Other miscellaneous provisions
0,4
0,8
16,5
12,4
(in € millions)
Total
For details on cash flows from investing activities (€ 18.2 million negative, including € 1.7
million in disposals on balance) and cash flows from financing activities (+ € 30.1 million), see the financial statements.
Net debt disclosed in the balance sheet saw a € 24.2 million increase, rising to € 69.8
million. Disregarding the capital of € 19.5 million (gross) raised by the 10% share issue,
the net debt position rose by € 43.7 million in 2014.
No testing against the covenants took place at year-end 2014.
26
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
PRO 0031: SPECIALIST TRAINER STORE
PRO finds inspiration in trends picked up from the street
all around the world and this makes it the place to go for
trainers for the young-minded lover of street style! The
mainly young customers will discover that the collection
offers a wide range of exclusive trainers, boots, bags
and accessories from well-known brands, which suit a
lifestyle that is constantly reinventing itself. PRO 0031
always knows how to create the right mix of ‘all-time
classics’ and the more ‘exclusive’ trainers! The leading
trendy top brands are especially well-represented in the
extensive range. All the advantages of ordering online
are of course available in the online shop, but customers
can also order through Intreza.nl.
32
stores in
the Netherlands
at top locations
273 employees
pro-shoes.nl
Follow on:
MACINTOSH RETAIL GROUP
27
REPORT OF THE MANAGING BOARD
Capital invested and ROCE
Net average capital invested (exclusive of acquisition effects)
fell by € 6.5 million in 2014 to € 161.5 million. There was a negative return on capital employed (ROCE) associated with continuing operations of 5.6%, compared to a positive ROCE of
0.1% in 2013. This decline was due to a fall in EBIT.
CAPITAL INVESTED AND ROCE
2014
2013
Net average capital invested exclusive of
acquisition effects1 (in € millions)
161.5
168.0
Net average capital employed inclusive of
goodwill (in € millions)
274.4
314.5
ROCE exclusive of acquisition effects (as a %)
- 5.6
0.1
ROCE inclusive of acquisition effects (as a %)
- 3.8
- 0.3
1. Relates to goodwill and capitalised brand names.
28
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
SCAPINO. IT PAYS!
With more than 200 shops, Scapino is the biggest supplier in the
Netherlands of shoes, fashion and sport and leisure items for the
whole family. For children’s shoes Scapino uses the Dr. Visser
mark of quality – the ultimate guarantee for the best quality, at an
attractive Scapino price. In addition, Scapino sells various A-brand
indoor and outdoor sports items, with an Aktiesport shop-in-shop
at almost every Scapino. Scapino recently introduced shoe collections approved by experts for those suffering from diabetes or
obesity.
Customers can also find the latest quality products at the best
prices in the online shop. What’s more, in every Scapino shop
there is also an Intreza Shoepoint where customers can pick up
shoes they ordered online.
204
stores in
the Netherlands
2,117 employees
scapino.nl
Folow on:
MACINTOSH RETAIL GROUP
29
REPORT OF THE MANAGING BOARD
EMPLOYEES AND ORGANISATION
Headcount
The headcount at Macintosh decreased by 370 to 10,461 (5,746 FTEs). At Fashion the
headcount fell by 376 to 8,752, while the headcount at Living increased by 13 to 1,628.
Fashion BeLux
Fashion NL2
Fashion UK
Jones
Brantano Bootmaker
Living
Kwantum
NL
Total3
Brantano1
Scapino
High
street
Scapino
Kwantum
B
YE 2014
1,070
0
2,028
2,117
2,013
1,460
1,582
46 10,316
YE 2013
1,036
151
1,980
2,412
2,057
1,411
1,575
40
10,662
2014
904
99
1,081
1,041
905
589
966
39
5,624
2013
879
101
1,069
1,047
862
655
959
36
5,608
In numbers
Average number
of FTEs
1. Including five stores in Luxembourg and three Firelle stores in Belgium.
2. Includes head office and distribution centre employees who are allocated to the store formats.
3. Excludes “other” employees; number in 2014: 145 (2013: 169) and FTEs in 2014: 122 (2013: 153).
MACADEMY. NEW TRAINING
COURSE FOR EMPLOYEES OF
MACINTOSH FASHION NL:
SOURCE OF NEW TALENT
The holding company of Macintosh focuses on activities such as financing, consolidation, legal matters, insurance, tax matters and risk management, and provides
centralised support services in the areas of social responsibility, ICT systems, investment evaluations and data analyses. The headcount at the holding company decreased
by six in 2014, to 24.
In 2014, there were 47 people employed at the Macintosh Hong Kong purchasing office,
which coordinates the activities of the retail formats in the areas of sourcing, purchasing, order tracking, quality controls, logistics, administrative services and social
conditions in the Far East (2013: 47).
Macintosh Intragroup Services provides services in the areas of funding, treasury
activities, and administration and accounting. The headcount at Macintosh Intragroup
Services stood at 10 in 2014 (2013: 11).
Employee representation
During the year under review, there were six formal joint meetings of the Managing
Board and the Central Works Council. One of these meetings was attended by a delegation from the Supervisory Board. As in previous years, the discussions were characterised by transparent, timely and constructive decision-making. The Central
Works Council, under the chairmanship of Mr W. de Graaf, held six scheduled meetings and two extraordinary meetings. The first extraordinary
meeting was dominated by the appointment of Mr Staelens as a member of the Managing Board of Macintosh Retail Group N.V., while the
second had to be convened as part of the refinancing operation. In
both of these meetings, the recommendations made by the Central
Works Council were unanimously positive.
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ANNUAL REPORT 2014
STEVE MADDEN: CONTEMPORARY
COLLECTIONS
At two trendy shops in the Netherlands and one
in Belgium, Steve Madden presents his quirky
and trendy collections. The American designer creates shoes and accessories which are
all the rage in both America and Europe. Many
leading artists and other celebrities are completely wild about his collections.
You can find them not only in our own shops
and online shops, but also at other Macintosh
and Intreza.nl outlets.
2
1in Belgium
stores in
the Netherlands and
stevemadden.eu
Follow on:
MACINTOSH RETAIL GROUP
31
OUTLOOK FOR 2015
General
Although a number of economic indicators are on an upward trend, the shoe retail market not yet seems
to really improve in 2015. Macintosh’s efforts will be focused fully on improving the operational and financial
performance in Fashion, on executing the transformation programmes in the Benelux and on implementing
the strategic agenda. Capital expenditure in 2015 is likely to be slightly below the level for 2014 (€ 16.5 million).
In addition, the headcount is expected to fall because of the closure of stores and the sale of operations.
No pronouncements are made as to sales or earnings in 2015. Operating EBIT in H1 2015 is expected to be
negative as usual, due to seasonal influences in Fashion.
Fashion NL
2014 proved a successful year for Fashion NL in terms of sales and market share. However, as the disappointing trend in earnings seen in the last four months of 2014 shows, the progress made was not sufficient robust
to overcome the poor market conditions. For this reason, at the start of 2015 additional measures were
defined that should lead to an improvement in operational performance and enable a better return to be made
on the increased market share. The action plans that have been introduced focus primarily on the following:
• Strengthening of the customer-oriented approach in stores;
• Continued growth in market share among cross-channel customers;
• Stronger focus on stock management, greater flexibility in purchasing and a more granular markdown policy;
• Further rent reductions and lessors’ contributions.
Fashion BeLux
Although sales and market share could be maintained over the past few years by expanding, underlying EBIT
was eroded by pressure on margins and an increase in employee benefits expense (related to indexation) and
higher rents (contractual indexation). The focus on Brantano was stepped up as a result of the sale of the
Scapino stores in Belgium in November 2014.
The most important measures aimed at bring about a recovery in earnings at Brantano BeLux in 2015 are:
• Working out the details of the new retail concept, starting with a pilot study conducted in a number of
stores; Transformation of 12 stores into Brantano outlets, where slow movers are sold, enabling invento-
ries at other Brantano stores to be kept more up to date.
• Optimisation of profit from the 3D foot scanner introduced in all stores in 2014, which provides a way to
build up the preferential relationship with the customer using targeted communication and activities.
• Focus on cross-channel customers using the new point of sale (POS) system introduced in all Brantano
stores in 2014, enabling full online-offline integration.
• Cost reductions achieved by means of reaching agreements on rent reductions and/or lessors’ contributions.
Fashion UK
At Fashion UK there were restraints in the past with regard to investments in the format and also the marketing efforts in recent years were not a the level they should have been. Despite this, in recent years sales
stabilised, and in 2014 the upward trend in sales and earnings set in. In 2015, the priority will once again be on
growth from additional concessions and new own stores, despite the planned sale of Fashion UK. The integration of Brantano and Jones Bootmaker, which was completed at the start of 2014, will allow Jones to benefit
from the expertise Brantano has in the areas of its strong purchasing and product processes and margin
management.
The main measures that are designed to bring about an increase in earnings at Fashion UK are:
• The opening of store concessions with a flexible cost structure and the opening of a number of own stores.
• Strengthening the Brantano brand at a regional level.
• Growth in online sales from new websites.
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ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
STRATEGY SHARPENING
In the context of the strategy sharpening, it has been decided to concentrate on the countries
where Macintosh leads the market in Fashion and where there is national store coverage so that
the cross-channel strategy can be implemented as efficiently as possible with the available financial resources. As a result, Fashion UK and Nea International (production and wholesale in
braces) will be sold in addition to home decoration discounter Kwantum, for which the intention
to sell was already announced in 2014.
MACINTOSH RETAIL GROUP
33
REPORT OF THE MANAGING BOARD
SUSTAINABLE BUSINESS PRACTICES
Macintosh has reported on sustainable business practices and the progress and results of its sustainable business policy
since 2009. A brief summary is provided in this annual report. The comprehensive report on sustainable business practices
can be found on the website. Macintosh’s CSR activities can be followed periodically on the “Backstage” blog.
Macintosh seeks to achieve sustainable, profitable growth and at the same time to improve the impact of its activities on
society and the environment. Sustainable business practices were introduced in the Living segment around 15 years ago.
After that we focused on Fashion, since this segment accounts for more than 75% of Macintosh’s turnover. In recent years,
sustainable business practices have taken on more shape and been given a greater focus. The strategy of Macintosh focuses
on customers and their wishes, which means that products and services have to be tailored to suit them. Moreover, our products also satisfy the existing and future demands of customers when it comes to sustainability. This is in keeping with our aim
of responsible products for all.
The corporate sustainability policy, which was adopted for all our store formats and own brands in 2013, focuses on the
longer term (3-5 years), and once a year it is reviewed and updated as necessary. The main pillars of the policy are as follows:
• Purchasing, supply chain and manufacturing: Improving working conditions in accordance with the BSCI code of conduct.
• Product and manufacturing: Safe products that contain no harmful substances, based on the German CADS list of
chemicals.
• Chain transparency: Complete transparency of the chains (from the inside out), focusing on the registration of factories
(i.e. where shoes, bags and clothing are made).
In 2014, Macintosh made progress on the three policy pillars in the area of commercial products:
• The commitment regarding working conditions at suppliers in risk countries, which BSCI (Business Social Compliance
Initiative) requires of all its members, was fulfilled. This means that at least 66% of all Fashion suppliers in those
countries comply with the BSCI Code of Conduct (2013: 50%).
• Talks were launched with the chemical industry with a view to studying potential developments, innovations and improve
ments related to leather tanning and synthetic materials.
• All of the shipping containers have undergone inspection to determine the extent to which gasses are present. The reject
rate fell once again (13%).
• Raising awareness among importers, agents and traders in order to improve chain transparency and provide insight into
in the production conditions of their suppliers and factories.
• Roll-out of Sustainable Business policy to suppliers of goods of a non-commercial nature, such as shop fittings, carrier
bags, coffee and flooring.
• Member and active partner of MVO Nederland and member of the leather coalition, in which two projects for making
leather more sustainable have been nominated.
• Talks started with various chain partners with which Macintosh has only indirect dealings (chemicals suppliers, slaughter
houses, tanneries).
• Participation in talks with other shoe retailers in the Netherlands through the CSR working group of the Shoe Wholesale
Association (Vereniging Grootwinkelbedrijf Schoenen - VGS) of the Dutch Retail Council (Raad Nederlandse Detailhandel),
with the aim of sharing knowledge and collaborating in the area of sustainable business practices where possible and
desirable.
• Launch of “Backstage” blog where readers are given a glimpse behind the scenes at our business and in the chain
(e.g. the production of shoes and leather). This is a personal, transparent way of responding to the growing demand for
clarity, transparency, engagement and honesty.
RESPONSIBLE PRODUCTS FOR ALL
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ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
The main steps taken and results achieved since 2009 are shown in the
table below. More detailed information can be found on the website.
The full report, as posted on the website, was prepared in accordance
with the guidelines of the Global Reporting Initiative (GRI 3.0). The
report complies with Application Level C (self-declared). By using the
GRI guidelines, Macintosh aims to increase the transparency and relevance of its annual report. The topics that are covered in this section
and on the website were proposed by internal experts. Furthermore,
the content is influenced by questions, comments and feedback from
stakeholders, such as NGOs, employees, shareholders and customers, and by developments in the sector, such as legislation and
standards. The GRI reference table and a history of sustainability at
Macintosh can be found at www.macintosh.nl/duurzaam_ondernemen.
Macintosh is interested in what you, the reader, think of our sustainability efforts. We therefore invite you to share your suggestions and
comments with us by sending an email to our Corporate Responsibility and Innovation Manager ([email protected]).
Policy
2009-2011
2012
2013
2014
2015
• Start made on defining central CSR policy (2009)
• Joined BSCI (2009)
• Start of chain transparency project with TFT (2010)
Determination of CSR policy, focus on three themes:
1.Improving working conditions
✓Step 1: shoes/bags/clothing factories in risk countries
• Joined CADS (2010)
• Signing of fur-free declaration (2011)
• Completion of in-house study into CSR issues in the footwear
industry (foundation of CSR policy) (2012)
✓Step 2: shoes/bags/clothing factories in non-risk countries
o Step 3: deeper in the chain (not yet scheduled)
2.Safe products free from harmful substances
3.Making the chain transparent
✓Step 1: focus on own purchasing and production (where are our products
made? Which factories do our importer and trader work with?)
Step 2: focus on parts/materials (where do the materials come from?)
Results
Goal | acton plan
• Improve working conditions: 33% BSCI compliance in risk countries
• Start of implementation of
RSL (compliance expected
in no less than five years)
• Reduce rejections due to
VOCs in containers
• Trace some shoe chains
from shoe to cow
• BSCI introduced to
suppliers / start of
implementation
• Launch of own RSL 1.0
(2010)
• Baseline measurement of
VOC inspection of
containers (2011), rejected:
35%
• Completion of study with
TFT into full chain
transparency (study of
provenance of materials,
from shoe to cow)
• On track with BSCI (compliance rate of 50% in risk
countries)
• VOC inspection by certified
gas measuring company
(rejection rate of 30%)
• Management report on our
own environmental impact
in stores, offices and
distribution centres
(energy, water, CO2, waste)
• Established supplier
evaluation system including
CSR themes
• Some shoe chains traced
from shoe to cow
• Improve working conditions: maintain 50% BSCI
compliance in risk
• Improve working conditions: 66% BSCI compliance
in risk countries
countries and work towards
• BSCI compliance started in
66%
• Increase RSL compliance,
increase awareness among
suppliers
• Reduce rejections due to
VOCs in containers
• Enhance chain transparency by identifying al
factories where our
products are made
non-risk countries
• Increase RSL compliance
• Reduce/maintain rejections
due to VOCs in containers
where possible
• Enhance chain transparency by identifying all
factories where our
products are made
• On track with BSCI (compliance rate of 60% in risk
countries)
• Improve working conditions: minimum level of
66% BSCI compliance in
• Update to RSL 2.0 (CADS) |
sampling, one-on-one
meetings with suppliers,
alternatives
• Rejection rate of containers
due to VOCs reduced to
17%
• Inclusion of CSR KPIs in
bonuses for purchasers
risk counties achieved
• BSCI compliance started in
non-risk countries
• RSL compliance increased
• Rejection rate of containers
due to VOCs reduced (13%)
• Improve working conditions:
maintain minimum level of
66% BSCI compliance in risk
counties
• Increase BSCI compliance in
non-risk countries
• Increase RSL (Restricted
Substance List) compliance
• Reduce/maintain rejections
due to VOCs in containers
where possible
• Enhance chain transparency
by identifying all factories
where our products are made
• Start of feedback to
suppliers based on
performance in our
supplier appraisal system
MACINTOSH RETAIL GROUP
35
REPORT OF THE MANAGING BOARD
RISKS AND
RISK MANAGEMENT
Introduction
Macintosh has set up its organisation in a way that combines decisive entrepreneurship with effective risk management. Risk management has become
top-of-mind and is embedded in the organisation and day-to-day operations.
A description of the design and effectiveness of the risk management and control
systems is available online at www.macintosh.nl. A description of credit risk,
liquidity risk, interest rate risk, currency risk and foreign currency instruments
(including the policy of Macintosh with regard to these risks) can be found in the
financial statements (see Note 15).
Given its activities in the Fashion and Living segments, Macintosh is dependent on
consumer spending to a great extent when it comes to turnover and earnings.
Consumers are affected by many factors that Macintosh cannot influence, such as
the state of the economy, the weather and changes in the area of technology. It
can assess and monitor the resulting risks, but it is not able to influence them. In
order to limit such risks, the cyclical, strategic and commercial risks, opportunities and threats are assessed, and anticipatory action is taken wherever possible.
Financing and ratios
Macintosh’s key financial instruments are bank loans, overdraft facilities, and
cash and cash equivalents. The main purpose of the financial instruments is
to raise funding for Macintosh’s operations. In addition, there are various other
financial assets and liabilities, such as trade receivables and trade payables, that
arise directly from the operations. The conditions of amongst other trade creditors and debts to suppliers are the outcome of individual negotiations. Macintosh
has no derivatives or financial instruments for trading purposes. For the policy on
managing currency risks, see the financial statements.
In mid-2014, a new borrowing facility for a maximum committed credit line of
€ 140 million (roll-over facility) consisting of a Tranche A (for € 125 million) and a
Tranche B (for € 15 million). In addition, a structured loan for € 20 million was
concluded with a number of major shareholders.
Two financial covenants have been agreed with the banks and are assessed on a
quarterly basis: a maximum leverage covenant (net debt / EBITDA) and an EBITDA
floor. EBITDA is measured over the preceding 12 months, and is based on operating profit before tax, interest, depreciation and amortisation, adjusted for any
sales of activities. Given the lower than expected results in 2014 and the strategic
decision taken after the reporting date to sell Fashion UK and Nea International, the structure and the level of the covenants made
in the € 140 million bank financing package will be adjusted in 2015. There is a risk that the agreed ratios will be exceeded whenever earnings come under pressure.
36
ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
OPERATIONAL RISK MANAGEMENT IN 2014
Key pillars supporting Macintosh’s operational risk management mechanism are the
‘Macintosh in Control’ (MIC) list and the action plans with task assignments complementing
these measures. Each year, action plans containing action points designed to mitigate identified
risks are drawn up for each group company. The quarterly progress reporting mandated by
Macintosh enables the Internal Control and Audit Department to monitor and audit progress.
These mechanisms ensure that the group companies pay appropriate attention to risk management throughout the year.
In addition to implementing the points for improvement resulting from the audit, based on the
MIC list and the action plans for each group company, and efforts were also made to optimise
operational risk management in 2014. The principal measures taken in this respect in 2014 are
set out below.
Improving risk management relating to cross-channel processes
Cross-channel is a key focus area for Macintosh, and a standard Macintosh cross-channel
platform is used. When it comes to risk management, a uniform platform offers advantages, as
risks can be managed under a generic risk management plan, whereas poor risk management
practices may have a substantial impact (e.g. on a company’s reputation).
At the end of 2013 it was established that the operational risk management of cross-channel
activities did not yet satisfy Macintosh’s requirements. In order to deal with the areas for
improvement that had been identified, a wide-ranging, detailed action plan was drawn up for the
internal control structure. The progress made on the action items is monitored, and adjustments are made, on a monthly basis. In December 2014 it was concluded that good progress
had been made on almost all designated action items. The areas in which improvements were
made included the revision of process responsibilities and the management of compliance
aspects.
Introduction of Tax Control Framework at Dutch divisions
Macintosh has a tax monitoring and control mechanism knows as the Macintosh Tax Control
Framework (TCF). This is an important tool for demonstrating compliance with relevant tax laws
and regulations, both internally and to the tax authorities.
The local implementation of the TCF at group companies is underway, and the payroll tax and
VAT components are already partially operational.
Main points in auditor’s management letter
The Managing Board is of the opinion that it can be useful to inform shareholders of the auditor’s main findings relating to risks and
risk management, as part of the risk assessment process.
Macintosh has engaged Ernst & Young Accountants LLP, as its external auditor, to audit the financial statements. As part of this
audit, the external auditor, in addition to issuing an independent auditor’s report, sets out its findings in a management letter and
audit report each year. These reports were issued to and discussed with the Managing Board and Supervisory Board, respectively.
Among other things, the external auditor tested the effectiveness of the internal control procedures and compliance with laws and
regulations in the context of, and to the extent that they are relevant to, the audit of the financial statements.
MACINTOSH RETAIL GROUP
37
REPORT OF THE MANAGING BOARD
MAIN POINTS IN AUDITOR’S MANAGEMENT LETTER
EY has reported that, because of the integration of back-office activities and the
related changes in the organisational structure, IT has become a matter of concern. EY has pinpointed two aspects. The first is the continuous assurance of the
effectiveness of the internal controls for the IT applications in use. The second is
the efficiency aspect associated with further reducing the number of IT applications in use so that the IT officers have more time to concentrate on the remaining applications. EY has also mentioned that, in view of the increase in online
sales stemming from the cross-channel strategy, Macintosh should focus on
further documenting its processes and internal controls and the related internal
risk assessments.
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ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
Conclusions
As in previous years, a positive assessment of operational risk
management can be made for 2014. With respect to operational risk management, all group companies complied with
the key internal requirements contained in the ‘Macintosh in
Control’ (MIC) list. All European entities were classified as
‘good’ or ‘very good’. Owing to the limited controls in place,
the Hong Kong operation was classified as ‘adequate’. In addition, good progress was made in the area of risk control
measures related to cross-channel activities.
There is a good level of awareness of risk management, and
adequate progress has also been made on the outstanding
action plans, at almost all group companies/divisions. The
status of operational risk management at Macintosh was
discussed during a meeting with the Audit Committee and the
Supervisory Board in December 2014. It was established that
the internal risk management system had functioned well in
the year under review.
The design of the risk management system is embedded in
the Macintosh risk management policy plan for 2014-2015,
which was formally approved by the Managing Board and
explained to the Supervisory Board’s Audit Committee at the
end of 2014. The 2014 evaluation of operational risk management resulted in the reaffirmation of the design, monitoring
responsibilities and tools used with regard to the risk
management mechanism.
OPERATIONAL RISK MANAGEMENT ISSUES IN 2015
Identifying new risks and modifying systems where necessary is an ongoing process that continues to be one of the Managing Board’s priorities. The operational risk management objectives for 2015 relate primarily to the following:
• compliance with the framework of standards defined in the ‘Macintosh in Control’ (MIC) list, and applicable legislation
and regulations;
• dealing with the most important outstanding areas for improvement, including those related to focus areas such as the
Tax Control Framework, the Bribery Act, PCI-DSS (Payment Card Industry – Data Security Standard), the revision of the
standards framework for risk management by external ICT service providers, and the implementation of a robust frame-
work in order to ensure compliance with the various representations and safeguards in the financing documentation.
The approach and focus areas for 2015 were discussed with, and approved by, the Audit Committee during its meeting in
December 2014.
MACINTOSH RETAIL GROUP
39
REPORT OF THE MANAGING BOARD
GOVERNANCE AND
RESPONSIBILITY STATEMENT
Governance
The General Meeting of Shareholders held in 2010 discussed the way in which Macintosh complies with the Dutch Corporate
Governance Code. Macintosh interprets three of the provisions differently:
II.1.1: The employment contract with one of the current members of the Managing Board (COO) has been concluded for an
indefinite period of time instead of consecutive four-year periods.
II.2.8: The employment contract with one of the current members of the Managing Board (COO) does not include a cap on the
maximum severance pay in the event of dismissal.
III.5.11:One of the Supervisory Board members has been appointed Chairman of the Remuneration and Appointment Committee
owing to his professional background, even though he is an executive director of another listed company.
Macintosh complies fully with the Code on the basis of the “comply or explain” principle.
The Managing Board and the Supervisory Board will continue to take responsibility for corporate governance at Macintosh. Any
major changes to its structure and to compliance with the Code will be submitted for discussion to the General Meeting of Shareholders as separate agenda items.
Macintosh’s corporate governance structure, including the performance of the General Meeting of Shareholders and its principal
powers, the rules for appointing and replacing members of the Managing Board and Supervisory Board, the rules for amending the
Articles of Association and the powers granted in the event of the issue or repurchase of shares, as well as a description of how
Macintosh complies with the Corporate Governance Code, are set out in detail on the website www.macintosh.nl.
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ANNUAL REPORT 2014
REPORT OF THE MANAGING BOARD
Responsibility statement
Each member of the Managing Board hereby states that, to the best of his/her knowledge:
1. The financial statements for the financial year 2014 give a true and fair view of the assets, liabilities, financial position and
earnings of Macintosh Retail Group N.V. and the consolidated group companies.
2. The Report of the Managing Board gives a true and fair view of the position of Macintosh Retail Group N.V. at the reporting date
and of the development and performance during the financial year 2014 of the group and its affiliated companies whose financial
information is set out in the financial statements.
3. The Report of the Managing Board sets out the main features of the management and control systems, as well as the essential
risks facing the company in 2014. For a more detailed description of the risk management systems, see www.macintosh.nl. The
Managing Board declares that it accepts responsibility for the design and effectiveness of the internal risk management and
control systems tailored to Macintosh. In 2014, the Managing Board conducted independent and systematic assessments and
reviews of relevant significant risks and the internal control structure. On that basis, the Managing Board declares that, to the
best of its knowledge, the internal financial reporting control system provides reasonable assurance that the financial reports
are free of material misstatement; it also concludes that the internal risk management and control systems operated effectively
in the year under review.
The risk management and control systems in place significantly reduce the risk of incorrect decisions being made, control
processes being deliberately circumvented, and laws and regulations not being complied with. However, it is virtually impossible
to identify, or fully document and manage, all risks at all times. As a consequence, the existing systems will never provide an
absolute level of assurance against the failure to achieve targets, nor will they be able to prevent all instances of material
misstatement, including loss, fraud or violations of laws and regulations.
4. In 2014, no exceptional transactions were conducted between Macintosh and natural persons or legal entities holding at least
10% of the shares in Macintosh Retail Group N.V. In the process of the refinancing in mid-November 2014, Macintosh received
a loan from four major shareholders, one of which held more than 10% of the shares in Macintosh at that time.
5. There were no significant transactions in 2014 involving conflicting interests between the members of the Supervisory Board
and/or the members of the Managing Board of Macintosh.
Maastricht-Airport, the Netherlands, March 18, 2015
Managing Board
K.C. Staelens, CEO
E.M.H. Coorens, COO
MACINTOSH RETAIL GROUP
41
REPORT OF THE SUPERVISORY BOARD
REPORT OF THE SUPERVISORY
BOARD FOR 2014
Another intensive year
2014 was an intensive year for Macintosh. As a consequence, the Supervisory Board
and the Managing Board had to hold frequent discussions on strategy, financial
developments, operational matters within the group and financing. In addition, two
changes to the Managing Board also required attention.
Macintosh made the significant decision to operate exclusively in the Fashion sector
in future and expressed in 2014 the intention to put the activities of Living up for sale.
This marked the end of many years’ work to achieve a sharper focus. At the same
time, a number of operational and commercial measures were defined in an
effort to make the shoe formats of Fashion stronger. These measures were
based upon the group-wide Rebalancing for Profitable Growth programme, which
encompasses areas for improvement, objectives, responsibilities and clear project
management.
Thanks to these measures In Fashion, there was a sharp increase in sales and underlying earnings up to the end of August. Starting in September, however, sales of
autumn and winter clothing lagged behind expectations owing to the unseasonably
warm weather. This had a considerable impact on Fashion’s sales and gross margin
in the most important period of the year. Kwantum managed to increase its sales
and EBIT. On balance, Macintosh’s “Underlying EBIT” for the year was down € 1.7
million on 2013.
In view of the problems affecting earnings and the related impact on cash flow, it
was necessary to pay closer attention to Macintosh’s financial position, partly in
connection with need for financing in the longer term. In July 2014, the Managing
Board, with the approval of the Supervisory Board, reached agreement on a refinancing operation in which major shareholders play a prominent role and banks
take a constructive approach. The Supervisory Board gave permission for a ‘sub 10’
issue of ordinary shares in order to increase equity.
The increase in sales and market share and the improvement in conversion rates
confirm the strength of the strategy. Macintosh will need to continue to invest in the
Fashion retail formats in the next few years in order to regain a visible, leading role
in the market. This will also involve cutting costs, for example by negotiating with
lessors on new rent conditions. At the same time, suppliers still place too much inventory risk with retailers and a solution has to be found for this. The way in which
obligations and risks are currently shared in the traditional supply chain needs to be
improved. This should lead to greater flexibility in terms of volumes, expansion of
“in season” ordering mechanisms and relevant terms and conditions governing
payments and mark-downs. In order to achieve this, it is important that there are
economies of scale and that our own purchasing processes are streamlined. In that
context, it is desirable to investigate actively whether Fashion’s competitive position
can be strengthened on a structural basis by joining forces with third parties and/or
consolidating formats.
No real improvements are expected in 2015 in the retail market in the countries
where Macintosh is active. The Managing Board will therefore need to focus all of its
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ANNUAL REPORT 2014
REPORT OF THE SUPERVISORY BOARD
attention on improving the operational and financial performance of Fashion. In order to use available resources as
effectively and complete the initiated transformation as soon as possible, it has been decided to concentrate on the
retail activities of Fashion Benelux. This implies that, in addition to the sale of Kwantum which intention was
announced already in 2014, Fashion UK and Nea International will be sold as well. The proceeds from the sale of these
three companies are expected to generate the liquidity needed to carry out the long-term transformation programmes
in the Benelux.
During the past year, the Supervisory Board has noted the high level of dedication and commitment to improving
matters at Macintosh that exists among management and employees, and it is highly appreciative of this.
Supervisory Board
Composition and performance in 2014
The members of the Supervisory Board at year-end 2014 were:
• Mr C.H. van Dalen (Chairman), professional supervisor;
• Mr W. Dekker, professional supervisor;
• Ms C.D.F. De Geyseleer, CFO of SGS Group;
• Mr L. Lindelauf (Vice-Chairman), member of the Executive Board of Randstad Holding N.V.;
• Mr W.T.C van der Vis, professional supervisor.
Mr Van Dalen has many years’ experience as a director at a number of listed companies and as supervisor, and qualifies as a financial expert within the meaning of provision III.3.2 of the Dutch Corporate Governance Code. Mr Dekker
has extensive experience as a CEO of a listed company with international operations and as a supervisor at various
companies and institutions. Ms De Geyseleer is CFO at a multinational listed company and is also a financial expert
within the meaning of provision III.3.2 of the Dutch Corporate Governance Code. Mr Lindelauf has long-standing experience as a director of a listed company and has extensive knowledge of providing services to consumers. Mr van der
Vis has experience as a director and supervisor in offline and online retail businesses, including in the fashion industry.
At the end of 2014, the Supervisory Board performed a comprehensive self-assessment by filling in a questionnaire.
The supervisory board members believed that its composition was sound, broad and diverse, and a good fit for
Macintosh, while noting that additional expertise in the area of fashion/online retail is desirable. With regard to performance, the evaluation revealed that the supervisory board members have sufficient expertise and time at their
disposal to allow them to exercise adequate supervision, including at times when many ad hoc meetings are necessary
to discuss strategic, financial and organisational developments (as was the case in 2014). It was considered that the
performance of the supervisory board members is sound, open and direct, and that there is adequate room for everyone to contribute.
The members of the Supervisory Board were independent in 2014 and the composition of the Supervisory Board in
2014 satisfied the independence requirements of the Dutch Corporate Governance Code. There was no compliance
with the requirements of the Management and Supervision Act (Public and Private Companies) in relation to gender
balance given that only one of the five members is female.
Retirement schedule
The retirement schedule for the Supervisory Board is as follows:
2015: W. Dekker (not available for reappointment)
2016:
C.H. van Dalen (not eligible for reappointment);
2017:
L.J.M.V. Lindelauf, C.D.F. De Geyseleer and W.T.C. van der Vis
According to the current retirement schedule, Mr W. Dekker is due to retire as a supervisory board member on April
30, 2015. Mr Dekker has indicated that he will not be available for a third term of office. The Supervisory Board regrets
that Macintosh will no longer be able to benefit from Mr Dekker’s broad knowledge and experience and wants to take
MACINTOSH RETAIL GROUP
43
REPORT OF THE SUPERVISORY BOARD
this opportunity to thank him for his contribution over the past eight years.
The Supervisory Board will not submit a motion to the upcoming General Meeting of
Shareholders to fill the vacancy created by the retirement of Mr Dekker. Acting ahead
of Mr C.H. van Dalen’s retirement in 2016, the Supervisory Board is considering, however, submitting a motion to the shareholders in the course of 2015 to appoint a new
supervisory director. The Supervisory Board has a preference for a candidate with a
large administrative background, if possible with experience in retail and knowledge of
online.
Supervision and meetings in 2014
The Supervisory Board met 16 times in 2014. Five of these meetings were scheduled
meetings, while the other 11 were supplementary meetings in person or telephone
conferences. On average, the Supervisory Board members had an attendance rate of
85% (rounded off). With the exception of the meetings addressing the performance of
the Managing Board, all meetings were held in the presence of the Managing Board
and the Corporate Secretary.
Outside the plenary sessions of the Supervisory Board, monthly consultations were
held between the chairman and the CEO, and the Chair of the Audit Committee and the
CFO were also in contact regularly to discuss current events.
Each month, the Managing Board sent a written update with explanatory notes to the
Supervisory Board to give the supervisory directors a good view of current events at
Macintosh as regards the financial situation, market developments and operational
progress.
The topics discussed during the meetings included the financial statements for 2013,
the half-year results and quarterly reviews for 2014, budgets and forecasts, the
investment plan and impairment issues. The Supervisory Board also discussed the
cross-channel strategy in depth, and it concluded, together with the Managing Board,
that this strategy should be validated by an external party. This resulted in the creation
of the Rebalancing for Profitable Growth programme, which was presented at the
General Meeting of Shareholders held at the end of April. As usual, attention was also
paid to the risks to which Macintosh is exposed and the design and effectiveness of
internal systems used for managing those risks, to activities in the area of CRS, and to
organisational aspects at Managing Board level and at Fashion NL.
Specific attention was paid to measures focusing on margin, costs and cash. Recurring
items that appeared on the agendas of the meetings were compliance with the covenants with banks and the refinancing of Macintosh, in part by means of a share issue.
The Supervisory Board regularly invited management teams from group companies to
clarify matters at meetings, so that its members could maintain an affinity with the
underlying activities and become acquainted with the qualities of the management
teams.
Committees
The Supervisory Board has two standing committees, the Audit Committee and the
Remuneration and Appointment Committee, which are tasked with providing the
Supervisory Board with support and advice related to their areas of focus and to
prepare the decision-making process for the Supervisory Board, although this does
not relieve the Supervisory Board of its own responsibilities. The committees report on
their meetings to the Supervisory Board.
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ANNUAL REPORT 2014
REPORT OF THE SUPERVISORY BOARD
The Committees of the Supervisory Board had the following members at year-end 2014:
• Audit Committee:
C. De Geyseleer (Chair) and W. Dekker;
• Remuneration and Appointment Committee:
L. Lindelauf (Chair), H. Van Dalen and W. Dekker.
The Remuneration and Appointment Committee is chaired
by Mr Lindelauf, who also sits on the executive board of
another listed company. This is not in compliance with provision III.5.11 of the Dutch Corporate Governance Code.
Audit Committee
The Audit Committee supports the Supervisory Board in
the performance of its duties in areas such as accounting,
the monitoring of risk management, and contact with the
external auditor. The committee met three times in 2014,
and the external auditor was in attendance for at least part
of two of these meetings. All of the Audit Committee meetings were attended by Macintosh’s CEO, CFO and Corporate Secretary.
The most important topics covered during the meetings
were the financial reports on the annual figures for 2013
and the half-year figures and interim management statements for 2014, the management letter for 2013 and the
recommendations made by the external auditor. Risks and
the risk management and control systems were also discussed extensively. Other matters that were covered included the work performed by, and relationship with, the
external auditor, and the audit plan for 2015. The financing
of Macintosh, the ratios contained in the financing agreements, impairment testing and the process for selecting a
new external auditor were also discussed.
Remuneration and Appointment Committee
The Remuneration and Appointment Committee makes
recommendations to the Supervisory Board concerning
the remuneration policy for the Managing Board, it advises
the Supervisory Board on the composition of the Supervisory Board and Managing Board and on any board
vacancies and how they are to be filled, and also prepares
the study into, and the conclusions drawn from, the annual
evaluation.
In 2014, the committee’s meetings focused primarily on
filling the vacancies on the Managing Board created by the
departure of the CEO and CFO and on the remuneration of
the Managing Board.
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REPORT OF THE SUPERVISORY BOARD
Remuneration
On April 27, 2011, the General Meeting of Shareholders set the
remuneration of the members of the Supervisory Board at
€ 30,000 and that of its Chairman at € 37,500. The members of
the Audit Committee receive a fee of € 3,000, while the
members of the Remuneration and Appointment Committee
receive a fee of € 1,500. The remuneration remained
unchanged in 2014. Macintosh does not currently believe it
would be expedient to make any changes to the remuneration
of Supervisory Board members in the near future.
Managing Board
Composition and performance in 2014
At year-end 2014, the Managing Board consists of Mr K.C.
Staelens (CEO) and Mr E.M.H. Coorens (COO). The Supervisory
Board appointed Mr Staelens a member of the Managing
Board with effect from July 1, 2014, and CEO with effect from
August 1, 2014, as the successor to Mr F.K. De Moor, following
an Extraordinary General Meeting of Shareholders. A contract
for services was concluded with Mr Staelens for a period of
four years. Mr T.L. Strijbos stood down as a member of the
Managing Board (CFO) with effect from November 1, 2014, and
will no longer work for Macintosh as of May 1, 2015. His duties
were taken over by J.G.A. Seyger (Interim CFO). The Supervisory Board plans to appoint Mr Seyger to the Managing Board
in the role of CFO with effect from 1 May 2015.
The Supervisory Board has concluded that the conditions in
which the Managing Board had to work in 2014 were turbulent.
Moreover, the Managing Board devoted a great deal of time
and energy to the strategic evaluation and the refinancing
operation. Attention was paid to the operational management
of the business activities and the implementation of the improvement plans in all countries, although improvements are
still possible and necessary. The Supervisory Board believes
that the Managing Board made sufficiently good progress
towards achieving structural improvements in results in
2014. Notwithstanding the provisions of the Dutch Corporate
Governance Code, the normal evaluation was not carried out
in accordance with the applicable procedure in 2014 owing to
the changes in the Managing Board.
In 2014, the Supervisory Board sought female successors to
the directors who had stepped down, in accordance with the
requirement to achieve the greatest possible level of gender
equality in the composition of the Managing Board as contained in the Dutch Management and Supervision (Public and
Private Companies) Act. Despite its efforts, no female successors were found.
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REPORT OF THE SUPERVISORY BOARD
The Supervisory Board would like to thank Mr De Moor and Mr Strijbos for their involvement with
and contribution to the developments at Macintosh during years.
Remuneration
Policy
The option and remuneration policy for the Managing Board was discussed at the General Meeting of Shareholders held in 2011 and endorsed by the meeting. There are no plans to change the
remuneration policy in 2015.
In addition to fixed and variable remuneration, the remuneration package for members of the
Managing Board includes an option package that is designed to encourage the members of the
Managing Board to remain committed to Macintosh in the long term.
Further information on the remuneration policy, fixed and variable remuneration, pension costs
and options of the Supervisory Board in 2014 can be found in the Remuneration Report and the
financial statements for 2014.
Variable remuneration in 2014
In the contract for services concluded with the new CEO, it was agreed that the CEO’s variable
remuneration for the period from the start date of the contract for services up to 31 December
2014 would amount to 50% of fixed remuneration on an annual basis, apart from in exceptional
cases. The new CEO was paid € 187,500 in variable remuneration for 2014.
The variable remuneration for the COO for 2014 was set a nil; as a result, he is governed by the
same conditions as other employees of Macintosh and its subsidiaries, who were not paid any
variable remuneration for 2014 either.
Remuneration of former members of the Managing Board
Mr De Moor (former CEO) did not receive any severance pay on his departure on August 1, 2014.
The Supervisory Board did, however, award him a pro rata share of the variable remuneration for
2014 (€ 139,000) because of the completion of the refinancing negotiations. Mr Strijbos (former
CFO) ceased to be a member of the Managing Board with effect from November 1, 2014, although
his employment contract will remain in effect until April 30, 2015. He will continue to receive his
fixed salary up to that date. Moreover, the Supervisory Board agreed with Mr Strijbos that he
would receive severance pay equal to nine months’ fixed salary (€ 243,000 gross) and that he
would be awarded a gross amount of € 120,000 as his pro rata share of variable remuneration for
2014 because of the completion of the refinancing. Further breakdowns are contained in the
financial statements.
Remuneration and options of the Managing Board in 2015
In accordance with the provisions of the contract, the Supervisory Board has raised the fixed
remuneration of the CEO with € 50,000 with effect from January 1, 2015. The Supervisory Board
believes that, as in 2013 and 2014, there is no reason to adjust the fixed remuneration of the COO
in 2015.
The variable remuneration for the members of the Managing Board for 2015 will be determined
at the discretion of the Supervisory Board in 2016, based on actual performance in 2015. Key
factors to be considered in this respect are (1) significant improvements in the operating (cash)
performance of Macintosh and (2) implementing the strategic agenda.
The Supervisory Board will award a total of 50,000 options on shares in Macintosh Retail Group
NV to the CEO, and 35,000 options to the COO, on the day of publication of the annual results for
2014 (March 19, 2015). The new CFO will also be granted 35,000 options. The exercise price of the
options is equal to the average closing price of the share on the three trading days preceding
MACINTOSH RETAIL GROUP
47
REPORT OF THE SUPERVISORY BOARD
March 19, 2015. The options will have a life of five years and may be exercised on condition that the option holder remains in the
employ of Macintosh for a further three years.
Shareholders
The Supervisory Board, represented by the Chairman, was in contact with major shareholders on numerous occasions in 2014
(subject to the usual confidentiality/stand-still obligations), in view of their involvement in the refinancing of Macintosh. Major shareholders have underscored their confidence in Macintosh by committing to a ‘sub 10’ issue of 2,434,254 shares at an issue price of
€ 8 per share and by providing a structured loan for € 20 million. The Supervisory Board is highly appreciative of the support that
has been offered to Macintosh.
General Meetings of Shareholders
All members of the Supervisory Board attended the annual General Meeting of Shareholders held on April 25, 2014. A total of 66%
(rounded off) of the issued share capital at that time was represented at the meeting (16,115,207 shares). The financial statements
for 2013 were adopted, and the net loss for the financial year 2013 was charged to reserves. The Managing Board and the Supervisory
Board were released from liability for their management and supervision in 2013, respectively. The conclusions of the Fashion
strategy study were announced, and the Rebalancing for Profitable Growth programme was explained. The power of the Managing
Board to issue ordinary shares, which includes the granting of rights to subscribe for ordinary shares and the restriction/exclusion
a preferential right, was renewed for a period of 18 months for an amount equal to 10% of issued share capital. The Managing Board
was authorised, for a period of 18 months, to acquire treasury shares up to a maximum of 10% of issued capital.
The appointment of Mr Staelens as a member of the Managing Board (CEO) was discussed, and unanimously supported by shareholders, at the Extraordinary General Meeting of Shareholders held on June 27, 2014.
Employee representation
The Supervisory Board believes that good communication between management and employee representatives is of crucial importance, and it has established that the directors and the employee representatives consulted with each other in good time, and in a
transparent and constructive way, throughout 2014, as they did in previous years. One of the meetings was attended by a delegation
from the Supervisory Board.
Risk management
At the December meeting, the Audit Committee and the Supervisory Board held a detailed discussion with the Managing Board on
risk management at Macintosh in 2014 and progress made in relation to the action plans based on the Macintosh in Control’ list.
The main conclusion was that progress had been made in the area of operational risk management in 2014, particularly with respect
to cross-channel activities, and that most of the outstanding action items related to compliance had been dealt with.
The external auditor tested the effectiveness of the internal control structure and compliance with laws and regulations in the
context of, and to the extent that they are relevant to, the audit of the financial statements. It reported that the relevant requirements
in the areas of risk management had been satisfied. The external auditor’s main findings are set out in the annual report in the
section on risk.
The general conclusion of the Supervisory Board is that, in terms of risk management and defined compliance areas, Macintosh
was in control in 2014. A more detailed description is provided in the section on risk included elsewhere in the report of the Managing
Board.
External auditor
In 2012, the General Meeting of Shareholders reappointed Ernst & Young Accountants LLP (EY) as Macintosh’s external auditor for
a period of four years, covering the financial years 2012, 2013, 2014 and 2015. In the context of the mandatory rotation of auditors,
the Audit Committee, acting on behalf of the Supervisory Board, followed the selection procedure that the Managing Board had
previously introduced for the appointment of a new external auditor. The Supervisory Board has discussed the assessment criteria
48
ANNUAL REPORT 2014
REPORT OF THE SUPERVISORY BOARD
and weightings of the Managing Board, and is following the recommendation of the Managing Board and the Audit Committee that
a motion be submitted to the General Meeting of Shareholders, nominating KPMG Accountants N.V. as the candidate to be Macintosh’s external auditor for a period of four years with effect from the 2016 financial year, i.e. up to and including the audit of the financial statements for the 2019 financial year.
Corporate Governance
The General Meeting of Shareholders held in 2010 discussed the way in which Macintosh complies with the Dutch Corporate Governance Code. Macintosh therefore complies with the Code on the basis of the “comply or explain” principle. A detailed description
of the corporate governance structure and the way in which Macintosh complies with the code can be found on the website (www.
macintosh.nl).
MACINTOSH RETAIL GROUP
49
REPORT OF THE SUPERVISORY BOARD
Adoption of financial statements for 2014
The financial statements for 2014 have been audited by Ernst & Young Accountants,
who issued an unqualified opinion. The Report of the Managing Board and the financial
statements for 2014 were discussed by the Supervisory Board with the Managing
Board, in the presence of the external auditor, on March 17, 2015, following an earlier
discussion with the Audit Committee. The financial statements for 2014 were signed by
the Managing Board and co-signed by the Supervisory Board (in accordance with the
provisions of Section 101(2), Book 2 of the Netherlands Civil Code) on March 18, 2015.
The financial statements for 2014 will be presented to the General Meeting of Shareholders on April 30, 2015. The resolution put to the shareholders will be:
• to adopt the financial statements for 2014;
• to charge the net result of € 101.6 million negative for 2014 to the freely
distributable part of equity;
• to release the Managing Board from liability for its management;
• to release the Supervisory Board from liability for its supervision.
In the context of refinancing, Macintosh has agreed with its lending banks that a
dividend will not be distributed until the leverage ratio is below 2 on a structural basis.
This requirement was not satisfied in 2014. For this reason, the Managing Board has
decided, with the approval of the Supervisory Board, not to make a distribution for
2014.
Maastricht-Airport, March 18, 2015
The Supervisory Board
C.H. van Dalen (Chairman)
W. Dekker
C.D.F. De Geyseleer
L.J.M.V. Lindelauf
W.T.C. van der Vis
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ANNUAL REPORT 2014
REPORT OF THE SUPERVISORY BOARD
SUPERVISORY BOARD DATA
C.H. VAN DALEN
CHAIRMAN
W. DEKKER
MEMBER
C.D.F. DE GEYSELEER
MEMBER
L.J.M.V. LINDELAUF
VICE CHAIRMAN
W.T.C. VAN DER VIS
MEMBER
C.H. (Henk) van Dalen (chairman) (62) was first appointed to the Supervisory Board
in 2003 and his current term of office ends in mid-2016.
Mr Van Dalen is since April 2013 chairman of the Supervisory Board and a member of
the Remuneration and Appointment Committee.
Nationality: Dutch.
Function: Director Avenue Business Consultancy B.V. and professional supervisor. Previously Chief Financial Officer and a member of the Supervisory Board of Royal DSM,
TNT N.V. and VimpelCom Ltd.
Other functions: Member of the Supervisory Board of Rabobank Nederland, BOM
Holding B.V., AVEBE U.A., Erasmus MC, Evides Waterbedrijf N.V., board member of
Nationaal Fonds 4 en 5 mei and member of Raad van Advies van Zorgorganisatie Zorgvuldig and of Stichting Nederland Cares.
W. (Wout) Dekker (member) (58) was first appointed to the Supervisory Board in
2007 and his current term of office ends at April 30, 2015.
Mr Dekker is a member of the Audit Committee and member of the Remuneration
and Appointment Committee.
Nationality: Dutch.
Function: Professional supervisor. Until Augustus 1, 2012 CEO and Chairman of the
Executive Board of Nutreco N.V.
Other functions: Chairman of the Supervisory Board of Rabobank Nederland and
Prinses Máxima Centrum voor Kinderoncologie and member of the Supervisory Board
of Randstad Holding N.V.
C.D.F. (Carla) De Geyseleer (member) (46) was first appointed to the Supervisory
Board at April 25, 2013 and her current term of office ends in mid-2017.
Ms De Geyseleer holds the chair of the Audit Committee.
Nationality: Belgian.
Function: CFO SGS Group.
Other functions: No relevant other functions.
L.J.M.V. (Leo) Lindelauf (Vice chairman) (63) was first appointed to the Supervisory
Board at April 25, 2013 and his current term of office ends in mid-2017.
Mr Lindelauf is vice chairman of the Supervisory Board and chairman of the Remuneration and Appointment Committee.
Nationality: Dutch.
Function: Member of the Managing Board of Randstad Holding N.V.
Other functions: No relevant other functions.
W.T.C. (Ronald) van der Vis (member) (47) was first appointed to the Supervisory
Board at September 30, 2013 and his current term of office ends in mid-2017.
Nationaliteit: Dutch.
Function: Professional supervisor and previously Executive Director of the Board &
Group CEO Esprit Holdings B.V. and before CEO Pearle Europe B.V.
Other functions: member of the Supervisory Board of Sonova Holding A.G., Beter
Bed Holding N.V., Douglas Holding A.G. and Miktom Topco (BasicFit) B.V.
MACINTOSH RETAIL GROUP
51
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
Shares
Shares in Macintosh shares have been listed on
the stock market of Euronext Amsterdam since
1962. The shares are traded under the ticker
symbol MACIN and the ISIN NL 0000367993, with
Reuters symbol MCIN.AS and Bloomberg symbol
MACIN.NA.
Macintosh’s authorised share capital amounts to
€ 36.0 million, divided into 45 million ordinary
shares and 45 million preference shares with a
nominal value of € 0.40 each.
Owing to the issue of 2,434,254 shares on July 15,
2014, the number of ordinary shares outstanding
at year-end 2014 was 26,776,779 (2013: 24,342,545).
At year-end 2014, Macintosh held 1,239,000 treasury shares (4.63%), compared to 1,259,090
(5.17%) at year-end 2013. The decrease was due
to the exercising of options.
Preference shares are registered and carry
special profit-sharing rights in accordance with
the Articles of Association. No preference shares
were issued in 2014.
SHARE CAPITAL
2014
2013
Number of shares outstanding at year-end1
26,776,779
24,342,545
Issued and paid-up share capital (in €)
10,710,720
9,737,018
Weighted average number of shares outstanding
24,206,943
23,029,418
1. Including 1,239,000 treasury shares (2013: 1,259,090).
STOCK MARKET DATA
2014
2013
1,984,244
1,393,969
14.7
11.6
5,569
3,808
7,781
5,467
58
46
9.60 / 3.42
8.95 / 7.67
Price at year-end (€)
3.60
8.74
Market capitalisation at year-end (in € millions)
96.4
212.8
Annual trading volume - number of shares1
Annual trading volume - value (in € millions)1
Number of transactions
1
Average daily trading volume - number of shares
1
Average daily trading volume - value (x € 1000)1
Highest/lowest price (€)2
1. Excluding any transactions conducted away from the market regulated by Euronext.
2. Highest price was on May 9, 2014; lowest price was on December 29, 2014.
52
ANNUAL REPORT 2014
SHAREHOLDER INFORMATION
CORPORATE GOVERNANCE
Disclosure of major holdings
The latest reports of major shareholders to the Netherlands Authority for the Financial Markets (AFM) show the following shareholdings
Code
in Macintosh. The actual shareholdings held by the shareholders
The General Meeting of Shareholders held in 2010
listed may differ from the stated percentages, since disclosure is
discussed the way in which Macintosh complies with
only necessary when a shareholding exceeds or falls below the
the Dutch Corporate Governance Code. For details on
thresholds laid down by law.
Macintosh’s departures from the Code (II.1.1, II.2.8
and III.5.11), reference is made to the governance and
Name shareholder
Percentage
responsibility statement in the report of the Managing
H.B. Capital B.V. (Breedinvest B.V.) (NL)
20.38%
Board. Macintosh complies fully with the Code on the
Delta Deelnemingen Fonds N.V. (NL)
11.23%
basis of the “comply or explain” principle. A detailed
Bestinver Gestion SGIIC S.A. (SP)
10.10%
description of the corporate governance structure
and the way in which Macintosh complies with the code
Delta Lloyd N.V. (NL)
6.64%
Navitas B.V. (NL)
6.06%
Darlin N.V. (NL)
5.46%
Corporate structure
Stichting Administratiekantoor Arkelhave B.V. (NL)
5.10%
Macintosh Retail Group N.V. is a two-tier company
Kempen Capital Management N.V. (NL)
5.01%
with a Managing Board and an independent Supervi-
Schroder PLc (UK)
4.97%
Financière de Léchiquier (FR)
4.85%
Via Finis Invest B.V. (NL)
3.11%
on June 28, 2011, which can be found on the website
Macintosh Retail Group
4.63%
(www.macintosh.nl).
1
1. 1,239,000 treasury shares.
can be found on the website (www.macintosh.nl).
sory Board. The powers, rights and obligations of the
Managing Board and Supervisory Board are laid down
in Articles of Association, as most recently amended
The Articles of Association can only be amended
following a proposal made by the Managing Board
Stichting Preferente Aandelen Macintosh Retail Group (Macintosh
that is approved by the Supervisory Board and must
Preference Shares Foundation) also notified the AFM of its potential
comply with the requirements as contained in Article
interest in respect of a call option granted on a number of shares
45 of the Articles of Association.
corresponding to a maximum of all outstanding Macintosh shares
minus one.
Managing Board
The members of the Managing Board have notified the AFM of their staff
Under the Articles of Association, the Managing
options and shares in Macintosh. At the end of 2014, Mr Staelens and
Board consists of one or more members (currently
Mr Coorens held 5,936 and 6,000 Macintosh shares, respectively. The
two), with the CEO having concluded a contract for
members of the Supervisory Board do not hold any shares in Macintosh.
services for a period of four years and the COO having
been appointed for an indefinite period of time. The
Share options
number of members of the Managing Board is deter-
Macintosh has a share option plan for members of its Managing
mined by the Supervisory Board. Under Article 15 (1)
Board and the boards and management of the group companies and
of the Articles of Association, the members of the
the holding company. The objective of the share option plan is to
Managing Board are appointed by the Supervisory
increase their long-term commitment to the company.
Board, which notifies the General Meeting of Share-
Granting options falls under the remit of the Supervisory Board. The
holders of intended appointments. The Supervisory
underlying idea is that the total number of options to be granted in any
Board may, after consulting the General Meeting of
one year may not exceed 2% of the issued share capital. The actual
Shareholders, suspend and dismiss members of the
granting takes place on the day the annual figures are published. The
Managing Board. The Supervisory Board appoints one
exercise price for options is equal to the average closing price of the
of the members of the Managing Board as chair.
share on the three trading days preceding the publication of the annu-
The Regulations of the Managing Board lay down the
al figures. The options expire after five years and are not linked to
division of duties and the working practices of the
performance criteria. No adjustments are made to the exercise price
Managing Board, as well as the procedures for deal-
or any other conditions during the life of the options. Options may not
ings with the General Meeting of Shareholders,
be exercised for three years, and only if the option holder is still em-
among others. These regulations have been posted
ployed by Macintosh at that point in time. The other conditions are laid
on the website www.macintosh.nl.
down in option rules that were established by the Supervisory Board in
December 2011.
MACINTOSH RETAIL GROUP
53
SHAREHOLDER INFORMATION
Supervisory Board
Under the Articles of Association, the Supervisory Board consists of at least three
members (currently five). They are appointed by the General Meeting of Shareholders on the basis of nominations made by the Supervisory Board. The General
Meeting of Shareholders and the Central Works Council can recommend candidates for nomination.
The profile outline for the Supervisory Board, which sets out the principles related
to the desired composition and size of the Supervisory Board and the knowledge
and experience of individual Supervisory Board members that is desired by
Macintosh, serves as a basis for the Supervisory Board when it decides on nominations. The profile outline has been posted on the website www.macintosh.nl.
For one third of the seats, a person recommended by the Central Works Council
is placed on the nomination list of the Supervisory Board, unless the Supervisory
Board objects to the recommendation based on the expectation that the person
who has been recommended will prove unfit as a Supervisory Board member or
that, in the event of the appointment being made, the Supervisory Board will not
function properly.
A Supervisory Board member retires by rotation no later than on the day of the
first General Meeting of Shareholders held after the end of a four-year period
following his or her appointment. In principle, a Supervisory Board member is
appointed for a maximum of three terms of four years, unless there are serious
reasons for deviating from this rule. The rotation schedule has been posted on the
website www.macintosh.nl. A Supervisory Board member is eligible for reappointment immediately after he or she has stood down. A Supervisory Board
member can be suspended by the Supervisory Board, but can only be removed by
the Enterprise Division of the Amsterdam Court of Appeal.
The Supervisory Board appoints a Chair and a Deputy Chair from its members.
The Supervisory Board has drawn up Regulations covering the duties and composition of the Supervisory Board, its working practices and decision-making
processes, and its relationship with the General Meeting of Shareholders
and the Managing Board. These regulations have been posted on the website
www.macintosh.nl.
Issuance of shares
Pursuant to Article 7 of the Articles of Association, the Managing Board can
decide to issue shares and to grant rights for the acquisition of shares. Such a
decision needs to be submitted to the Supervisory Board for approval. Article 7 of
the Articles of Association stipulates that the period during which this authority
exists is set by the General Meeting of shareholders, and that such periods may
not exceed five years. The scope of the authority is also set by the General Meeting
of Shareholders.
On April 24, 2014, the General Meeting of Shareholders extended the designation
of the Managing Board as the competent body for issuing ordinary shares until
October 24, 2015, for an amount equal to 10% of the issued share capital. This
authority was made use of in 2014.
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ANNUAL REPORT 2014
SHAREHOLDER INFORMATION
PROTECTIVE MEASURES
The object of Stichting Preferente Aandelen Macintosh Retail Group (Macintosh Preference Chares Foundation) is to promote
the interests of Macintosh Retail Group N.V., its business and all those involved with it, in connection with which all potential
influences that could threaten continuity, independence or identity which could be in conflict with the aforementioned interests
are avoided wherever possible, among other things. In 1993, Macintosh concluded an agreement with the Foundation that gives
the Foundation the right - as a further preventive measure, and on its own imitative - to take preference shares (call option) and
exercise the attached voting rights if a hostile takeover bid is made or impending. This agreement was amended in mid-2008.
A hostile takeover bid is understood to mean a bid for Macintosh’s ordinary shares, with a view to transferring control to the
party making the bid without the consent of the Supervisory Board and/or without the Supervisory Board having been notified
in advance. According to Macintosh and the Foundation, the call option was granted to the Foundation partly with a view to
preventing, delaying or complicating any undesirable shareholder influence in Macintosh or any undesirable concentration of
control in the company. The maximum number of preference shares that can be acquired by the Foundation without the approval of the General Meeting of Shareholders is equal to the number of shares outstanding minus one.
Under Section 346(c) of Book 2 of the Netherlands Civil Code, Macintosh has granted the Foundation the right of enquiry as
referred to in Section 345 of Book 2 of the Netherlands Civil Code, enabling the foundation to achieve its objective without being
required to use the call option it has been granted.
The Foundation’s administration currently consists of the following independent members:
Name
Appointed/reappointed
Appointed until
Age
Position
J.A.J. Vink (chair)
2009 / 2013
2017
67
Former CEO of CSM N.V.
B.H.M.J.J. Verwilghen
2014 2018
62
Company Secretary of SBM Offshore N.V.
M.J. Cools
2011
2015
57
Attorney-at-law / partner at
De Advocaten van Van Riet B.V.
The Foundation’s administration is independent of the company, since none of the members: (a) is a member or former member of the Managing Board or Supervisory Board of the company or any of its group companies; (b) is employed by the company
or any of its group companies; or (c) is a permanent adviser to the company or any of its group companies. The administrators
do not hold financial stakes in the company. The Foundation is an entity independent of Macintosh within the meaning of Section
5:71(1)(c) of the Financial Supervision Act.
MACINTOSH RETAIL GROUP
55
SHAREHOLDER INFORMATION
Inside information
Macintosh has a regulation covering the ownership of and transactions in Macintosh securities. Apart from the applicable statutory
banks, transactions in Macintosh shares are forbidden during lock-up periods prior to the publication of the annual results, the
half-year results and the quarterly results. The members of the Supervisory Board and the Managing Board, Directors of the
principal group companies and a number of holding company staff must observe longer lock-up periods in some cases.
In addition to the regulations, separate guidelines on transactions in other securities apply to members of the Supervisory Board
and Managing Board. The key provision of these guidelines is the requirement that members of the Supervisory Board or Managing
Board report any transactions in securities in Dutch listed companies with which Macintosh has a significant relationship, or any
transaction in securities issued by Dutch listed companies in respect of which the relevant member of the Supervisory Board or
Managing Board, given his or her position at Macintosh, is likely to be able to form a better assessment than is possible based on
information in the public domain.
Investor relations
Macintosh’s IR policy aims to actively provide accurate, up-to-date and relevant information to shareholders and all other stakeholders, inside and outside the Netherlands. Responsibility for Investor Relations rests with the CEO, who develops and implements the
strategy in this area in collaboration with the CFO and the Corporate Secretary.
Macintosh has drawn up a Disclosure Policy (published on www.macintosh.nl) that sets out the rules on handling and disclosing
information to third parties. Restricted periods run from December 1 of a given year until the time of publication of the annual
results for that year, from June 1 until the time of publication of the half-year results, and during a two-week period prior to the
publication of quarterly review.
56
ANNUAL REPORT 2014
SHAREHOLDER INFORMATION
All press releases and annual reports, information on meetings of shareholders and other information made available by Macintosh
in the context of corporate governance and statutory requirements can be found on the website www.macintosh.nl, as can a list of
the documents published in 2014 and registered or filed with the AFM. The staff magazine Macinform is also available on the website. The website can also be used to subscribe for our email service in order to receive immediate notification of the publication of
press releases.
Contact
For more information, please contact:
Pat Hünen (Corporate Secretary) or Marjon Geuns
Telephone: +31 (0)43 3280 728
Email: [email protected] or [email protected]
www.macintosh.nl
Company data
Macintosh Retail Group N.V.’s registered office is in Maastricht, the Netherlands. Macintosh Retail Group N.V. is registered at the
Trade Registry of the Chamber of Commerce and Industry in Limburg under number 14628300.
Its business premises are located at Amerikalaan 100, 6199 AE Maastricht Airport, the Netherlands.
Its postal address is P.O. Box 110, 6190 AC Maastricht-Airport, the Netherlands.
Telephone: +31 (0)43 3280 780
Email: [email protected]
www.macintosh.nl
FINANCIAL CALENDAR FOR 2015
Publication of first quarterly figures for 2015: April 30, 2015, before opening of stock exchange
General Meeting of Shareholders:
April 30, 2015, 2 p.m.
Publication of half-year results for 2015:
July 29, 2015, before opening of stock exchange
Publication of third quarterly figures for 2015: October 28, 2015, before opening of stock exchange
Dates can be subject to change
MACINTOSH RETAIL GROUP
57
RETAIL IS OUR BUSINESS
MANAGING BOARD, GROUP EXECUTIVES
AND DIRECTORS
MANAGING BOARD
K.C. Staelens (45)
CEO
E.M.H. Coorens
(50)
COO
J.G.A. Seyger (44) interim CFO
GROUP EXECUTIVES
K.B. De Moor
(49)
Group ICT Director
P.T.A. Hünen
(55)
Corporate Secretary and Head of Group Legal
J.H.J. Linssen
(43)
Group Finance Director
DIRECTORS OF GROUP COMPANIES
Fashion
Fashion BeLux
S.K.B. van Weyenbergh (53)
Managing Director
N.F.L. Bondroit (38)
Director of Management Services
Fashion NL
J.C. Holscher
(50)
Managing Director
Y.N Tiberius (40) Director of Management Services
Fashion UK
D. Short (52)
Managing Director
T. Boot (49)
Director of Management Services
Nea International
R. Müller (51)
Director
Living
Kwantum
R.J. Berns (53)
Managing Director
R.E. de Lange (46)
Director of Management Services
Macintosh Intragroup Services
G. Jacobs (43)
Director
Macintosh Hong Kong
H.J. Kuperus (52)
Director
Services
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ANNUAL REPORT 2014
RETAIL IS OUR BUSINESS
MANAGING BOARD DATA
K.C. STAELENS
CEO
K.C. Staelens (45)
Kurt Staelens was appointed as a member of the Managing Board and CEO of Macintosh on July 1,
2014. Mr Staelens has Belgian nationality.
Mr Staelens was previously Vice-President of Sales and E-Business at telecoms company
Belgacom in Brussels, a position he held from 2012 to 2014. In the course of his career he has
held various commercial management positions and also owned his own online business.
Previous positions:
2010-2012: CEO of Neckermann.com Benelux. 2006-2009: Commercial Director of Belgium
Brussels Airport. 2001-2006: Strategy Director, Residential Markets Division Belgium (20052006), Product Marketing Director, Residential Markets Division Belgium (2003-2005), and
Indirect Sales Director, Residential Markets Division Belgium (2001-2003), at Telenet. 19982001: Founder and Belgium General Manager of Proxis.com. 1996-1998: Associate (Belgium,
Switzerland & UK), McKinsey & Company. 1991-1996: Brand Manager, Reckitt & Colman Belgium, Client Service Executive, AC Nielsen Belgium, and Assistant Auditor, KPMG Belgium.
Education:
Kurt Staelens studied at KU Leuven and graduated with distinction in 1991, having obtained a
master’s degree (MSc) in Commercial Engineering. In 1996 he was awarded an MBA by the Kellogg School of Management, Northwestern University, USA, graduating with high distinction.
E.M.H. COORENS
COO
E.M.H. Coorens (50)
Eric Coorens was appointed member of the Managing Board of Macintosh on June 1, 2007,
and COO on July 1, 2007. Mr Coorens has Dutch nationality. He has worked with Macintosh
since 1996 in the positions of:
1996-1998: Project Manager / Information Manager at Macintosh. 1998-1999: Director of Management Services of Kwantum Deco Group Belgium. 1999-2002: Director of Product Management
of Kwantum Deco Group Netherlands. 2002-2007: Managing Director of Kwantum Deco Group
Netherlands and Belgium. Previously, Eric Coorens was employed in the positions of Project
Manager at RCL, Kerkrade (1989-1991), Project Manager/Information Manager at Vendex International (1991-1995), and Senior Management Consultant at KPMG Management Consulting (1995-1996).
Education:
Eric Coorens studied mechanical engineering at Heerlen Technical College. In 1994, he graduated from PUC, Diepenbeek (Belgium) with a master’s degree in business administration
(MBA). He has taken various management training courses, included a bachelor’s programme
in economics and strategic planning and management in retail at Babson University, USA, and
at Vlerick Management School.
Other positions:
• Chairman of the Shoe Wholesale Association (VGS)
• Member of the board of the Dutch Retail Council
J.G.A. SEYGER
INTERIM CFO
J.G.A. Seyger (44)
The Supervisory Board plans to appoint Mr Seyger to the Managing Board in the role of CFO
with effect from 1 May 2015. Mr Seyger has Dutch nationality.
Other relevant functions:
Global Director Finance (2012-2014), Director Business Control (2012) and Director Treasury,
Insurance & Working Capital (2003-2011 - 2003-2007 as Deputy Treasurer) at TNT Express N.V.
The Netherlands. Assistant Treasurer Sara Lee | DE The Netherlands (2000-2003). Head of Front
Office Support, Investment Banking division ABN Amro Bank, The Netherlands (1997-2000).
Team leader, Derivatives Operations & Accounting, Investment Banking division Rabobank,
The Netherlands (1995-1997).
Education:
Master of Business Administration (MBA) University of Groningen, The Netherlands (19881994). Gymnasium Jacobus College, Enschede. The Netherlands (1982-1988).
MACINTOSH RETAIL GROUP
59
RETAIL IS OUR BUSINESS
LIST OF ADDRESSES
Fashion
MACINTOSH FASHION UK
Brantano UK
MACINTOSH FASHION NL
Interlink Way West, Bardon Coalville Leistershire
Hoogenbosch Retail Group
LE67 1LD UK
Larenweg 70, 5234 KC Den Bosch
Telephone:+44 870 990 1601
The Netherlands
Fax:
Telephone:+31 73 648 34 83
Internet: www.brantano.co.uk
Fax:
eMail:[email protected]
+31 73 644 41 28
+44 870 990 1602
Internet:www.dolcis.nl
www.manfield.com
Jones Bootmaker
www.invito.com
18 Maple Road, Eastbourne East Sussex
www.pro-shoes.nl
BN23 6NZ UK
www.stevemadden.nl
Telephone:+44 1323 730 532
eMail:[email protected]
Internet: www.jonesbootmaker.com
eMail:[email protected].
Intreza
Amerikalaan 100, 6199 AE Maastricht-Airport
Living
The Netherlands
Telephone:+31 43 328 07 80
KWANTUM THE NETHERLANDS
Internet: www.intreza.nl
Belle van Zuylenstraat 10, 5032 MA Tilburg
eMail:[email protected]
The Netherlands
Telephone:+31 13 462 66 26
Nea International B.V.
Fax:
Europalaan 31, 6199 AB Maastricht-Airport
Internet:www.kwantum.nl
The Netherlands
eMail:[email protected]
+31 13 463 79 79
Telephone:+31 43 407 92 20
Internet:www.push.eu/www.psb.eu
KWANTUM BELGIUM
eMail:[email protected]
Rijksweg 376, 3630 Maasmechelen
Belgium
Scapino The Netherlands
Telephone:+32 897 701 68
Industrieweg 28, 9403 AB Assen
Fax:
The Netherlands
Internet:www.kwantum.be
Telephone:+31 592 34 00 42
eMail:[email protected]
Fax:
+31 592 34 49 04
Internet:www.scapino.nl
+32 897 701 52
Dienstverlening
eMail:[email protected]
MACINTOSH HONG KONG
MACINTOSH FASHION BELUX
Unit 815, 8th Floor Houston Centre, 63 Mody Road,
Brantano Belgium
Tsim Sha Tsui East Kowloon, Hong Kong
Kwadelapstraat 2, 9320 Erembodegem
Telephone:+852 273 579 39
Belgium
Fax:
Telephone: +32 53 65 06 11
Fax: +852 273 578 70
eMail:[email protected]
+32 53 66 50 08
Internet: www.brantano.be
MACINTOSH INTRAGROUP SERVICES
eMail:[email protected]
Rijksweg 376, 3630 Maasmechelen
Belgium
Telephone:+32 897 701 50
Fax:
+32 897 701 69
eMail:[email protected]
60
ANNUAL REPORT 2014
RETAIL IS OUR BUSINESS
Realisation: Caris & Sak - Heerlen, The Netherlands
www.carissak.nl
MACINTOSH RETAIL GROUP
61
RETAIL IS OUR BUSINESS
MACINTOSH RETAIL GROUP N.V.
Amerikalaan 100, 6199 AE
P.O. box 110, 6190 AC
Maastricht-Airport
The Netherlands
Tel. +31 43 328 07 80
Fax +31 43 325 70 30
www.macintosh.nl
[email protected]