Pierce Group AB (publ) (the "Company") will make an extraordinary provision for obsolete and slow-moving inventory, affecting earnings in Q3 2023 by approximately SEK 44 million. Furthermore, an impairment relating to trademarks of approximately SEK 20 million, due to a consolidation of the brand portfolio, will affect the Company's financial results over the next few years, starting in Q4 2023. Neither have any cashflow implications.
In connection with the preparation of its third quarter interim report ("Q3 2023"), the Company has decided to adjust the assumptions underpinning write-down of inventory, facilitating work with shorter buying cycles and an accelerated speed to market. This enables an enhanced customer proposition that offers new products, more regularly. This will affect the profit and loss statement for Q3 2023 with approximately SEK 44 million.
Furthermore, to accelerate the development of market leading private brands, the Company has decided to consolidate its brand portfolio, spreading investments across fewer brands. Some private brands will be removed, and products merged into the remaining brands. This will result in an impairment relating to trademarks of approximately SEK 20 million that will be distributed over the next few years, starting in Q4 2023, as products are migrated to the remaining brands. The cost will be reported as an item affecting comparability.
Göran Dahlin, CEO says: “The market dynamics and the competitive landscape have changed significantly in just a few years, and as such, these measures are necessary operational steps in achieving long-term profitable growth for the Company.”
The Q3 2023 Report will be published on 17 November 2023.