Related to the need to even the supply terms on all markets, Silvano Fashion Group has amended the terms of supply. The goal of this is to establish unified pricing policy of all our brands on all consumer markets where Silvano is active. In Russia, the new policy was introduced from April 15, 2014.
As a result of this change, a new base price list has been introduced that takes into account the sales prices of our production companies. Also an unified discounts policy shall be applied, that shall take into account the pre-established key performance indicators, sales growth, prepayments and compliance with the franchise standards.
Some of our distributors have issued their own view on the conclusion of the commercial agreements via media agencies (i.e. "Äripäev online", 04.05.2014). Silvano Fashion Group states that such articles are initiated by few distributors who try to influence the company via public with the purpose of receiving better purchasing terms. In our view, the distributors' real concern is related to the devaluation of the Russian Ruble during 2013 and 2014; and to the complicated macroeconomic environment.
In summary, the effect of the dispute to the financial results of the company is not significant. Our results are today dependent on the overall purchasing power of end customers. The disseminated news do not have significant effect on our production companies in Belarus and Latvia, either, the production plans remain unchanged.
Silvano Fashion Group issues its Q1 2014 results latest by May 9, 2014.
Märt Meerits Member of the board Silvano Fashion Group +372 6845 000 info@silvanofashion.com
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