Financial crisis hit clothing retailers hard

Income of clothing stores declined sharply between 2010 and 2013 in the Netherlands. Operating profit fell from over 500 million euros in 2010 to just 150 million in 2013, a drop of 70 percent, Statistics Netherlands revealed on Monday.By contrast, average profits of the entire retail fell in the same period by 16 percent. The reason for the strong decline in the profits level is a sharp drop in sales, the Dutch institution reported. Revenues of the industry fell by 700 million, or 7.2%. A decline in costs that occurred during the same period was significantly smaller. Costs only fell by 300 million, or 3.4%. As a result, operating profits decreased from 5.4 percent to 1.6 percent, as a share of sales. A relatively small decrease in costs is explained by an increase in price for housing and a rather surprising growth of personnel expenses. Costs of staff for clothing retailers rose by 1.5 percent, despite most of the retailers faced a reduction in expenditures of staff.