2023 Financial highlights: Significant year in turbulent waters

2023 was another year of significant challenges: almost all of us have felt the effects of both global and local economic uncertainty, mounting interest rates, continuing high inflation, volatile markets, and, of course, growing geopolitical tensions. While these challenges have undoubtedly reflected within our company, affecting our customers, partners, and the regions where we operate, their implications on the broader global landscape are far more important.

Despite the unsettling landscape, 2023 was a significant year for our company. We navigated the turbulent waters by finalizing our restructuring plan, diligently reducing operating costs, and enhancing overall efficiency, resulting in improved profitability. Notably, our revenues for 2023 reached EUR 9,280 thousand (a slight decrease of 3.22% from 2022’s EUR 9,588 thousand), while our gross profit increased 2.72% from the previous year.

We continued work on updating our Ivo Nikkolo stores. We closed five stores, renovated two existing establishments into stunning new concept stores, and opened one new Ivo Nikkolo pop-up store. Demonstrating the positive impact of these changes, our sales per square meter surged by an impressive 23.61%, underscoring the collective effort of our people to enhance store efficiency. Looking forward, increasing efficiency with our current store network remains a central focus for the years ahead. Despite variations in regional retail performance, we achieved a combined 6% growth in total net sales in Estonia and Latvia. In contrast, Lithuania experienced a 22% decrease in retail net sales, primarily attributed to the closure of four stores. Our e-commerce experienced a noteworthy 7% growth compared to the previous year, exceeding 1 million euros in net sales of Ivo Nikkolo products for the first time. This achievement reflects the success of our omnichannel strategy and the enhanced functionality of our new and improved Ivo Nikkolo e-store. In an exciting expansion, we ventured into the Business-to-Business (B2B) market in 2023, focusing on wholesale and consignment sales of Ivo Nikkolo products within and beyond the Baltics. This strategic move aims to bolster the growth of Ivo Nikkolo product sales and elevate brand awareness.

I take immense pride in the resilience displayed by our company and the remarkable achievements of what our over hundred employees around the Baltic countries have achieved, collectively and individually. I am grateful for all our business partners for the continued support and trust in the past difficult years for our company.

As champions of Estonian fashion design, our role extends beyond clothing. The work we do matters and has impact. We serve as cultural ambassadors, showcasing heritage and empower self-expression. We help facilitate a language of expression, enabling people to communicate their identity, aspirations, and emotions.

Margus Olesk, Chief Financial Officer of Baltika Group