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Stock Analysis & ValuationGERRY WEBER International AG (GWI2.DE)

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Sector Valuation Confidence Level
Moderate
Valuation methodValue, Upside, %
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Intrinsic value (DCF)n/a
Graham-Dodd Methodn/a
Graham Formulan/a

Strategic Investment Analysis

Company Overview

GERRY WEBER International AG is a leading German fashion and lifestyle company specializing in ladieswear, operating under the GERRY WEBER, TAIFUN, and SAMOON brands. Founded in 1973 and headquartered in Halle, Germany, the company designs, produces, and trades a wide range of women's apparel, including T-shirts, knitwear, blouses, dresses, and accessories like bags and scarves. GERRY WEBER operates through three key segments: Wholesale, Retail, and E-Commerce, leveraging a multi-channel distribution strategy that includes 559 retail stores, 210 franchised stores, and 1,410 shop-in-shops as of December 2021. The company serves both domestic and international markets, positioning itself in the competitive apparel manufacturing sector. Despite challenges in the fashion retail industry, GERRY WEBER maintains a strong brand presence in Germany, catering to mid-to-premium segments with a focus on quality and timeless designs.

Investment Summary

GERRY WEBER International AG presents a mixed investment profile. The company reported a net loss of €35.1 million in FY 2022, reflecting ongoing challenges in the competitive fashion retail sector. However, it generated €28.1 million in operating cash flow, indicating some operational resilience. With a market capitalization of €24.9 million and negative beta (-130.6), the stock exhibits high volatility and weak correlation with broader market trends. The lack of dividends and negative earnings per share (EPS) may deter income-focused investors. That said, its strong brand recognition in Germany and diversified sales channels (retail, wholesale, e-commerce) could offer recovery potential if the company successfully executes cost optimization and digital transformation strategies. Investors should closely monitor debt levels (€131.7 million) and liquidity (€43.2 million cash).

Competitive Analysis

GERRY WEBER operates in the highly competitive European fashion retail market, where it faces pressure from fast-fashion giants, premium brands, and e-commerce disruptors. The company’s competitive advantage lies in its strong brand heritage, particularly in Germany, and its multi-channel distribution strategy combining physical retail with e-commerce. However, its mid-to-premium positioning makes it vulnerable to competition from both affordable fast-fashion players (e.g., H&M, Zara) and higher-end designers. GERRY WEBER’s reliance on the German market (a mature but stable region) provides a loyal customer base but limits growth compared to global competitors. The company’s financial struggles, including recent losses, suggest it has not fully adapted to the digital shift in fashion retail. Its product focus on classic women’s wear differentiates it from trend-driven fast fashion but may lack appeal among younger demographics. To regain competitiveness, GERRY WEBER must enhance its e-commerce capabilities, streamline costs, and potentially expand into adjacent markets like sustainable fashion.

Major Competitors

  • Hennes & Mauritz AB (H&M) (HNNMY): H&M is a global fast-fashion leader with strong pricing power and rapid inventory turnover. Unlike GERRY WEBER, H&M targets a younger, trend-conscious demographic with lower price points. Its vast international presence and digital sales strength overshadow GERRY WEBER’s regional focus. However, H&M faces sustainability criticisms and margin pressures.
  • Inditex (Zara) (ITX.MC): Inditex, Zara’s parent company, excels in agile supply chains and trend responsiveness, outpacing GERRY WEBER’s slower, season-based model. Its vertically integrated operations provide cost advantages. While GERRY WEBER emphasizes classic styles, Zara thrives on fast-fashion innovation. Inditex’s global scale dwarfs GERRY WEBER’s regional operations.
  • adidas AG (ADS.DE): Though primarily sportswear-focused, adidas competes in casual apparel and accessories. Its strong brand equity and global reach contrast with GERRY WEBER’s niche in women’s formalwear. Adidas benefits from higher margins and athletic trends but lacks GERRY WEBER’s specialization in classic ladieswear.
  • HUGO BOSS AG (BOSS.DE): HUGO BOSS operates in the premium segment, offering higher-margin products than GERRY WEBER. Its strong international wholesale network and luxury appeal provide resilience. However, GERRY WEBER’s broader price range and accessibility in Germany give it an edge in mid-market segments.
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