Passat strengthens in image-assisted selling
- Advertisement -

(News Bulletin 247) – Passat is shopping. The French group wants to strengthen itself in image-assisted sales by negotiating the takeover of Best of TV, the teleshopping subsidiary of the M6 ​​group. Investors, too, have buying fever and are back on the Passat title.

Passat – not to be confused with the flagship model of the Volkswagen brand – is strengthening its core business. The historic leader in image-assisted sales has entered into exclusive negotiations with the M6 ​​group as part of a project to acquire its subsidiary dedicated to teleshopping Best Of TV, 51% owned by the media group French. The market enthusiastically welcomed this external growth operation, the Passat share rebounded by more than 7% to 5.14 euros, around 3:00 p.m. to return to 3-month highs.

- Advertisement -

For Passat, the acquisition of Best of TV is a great opportunity to strengthen its position in the world of image-assisted sales. The home shopping subsidiary of the M6 ​​group offers various niche products in mass distribution, including those exclusive to home shopping. These are generally accompanied, in store, by a promotion with a demonstration film.

“Passat SA and Best of TV evolve in the same competitive universe and offer different and complementary ranges to their customers. This complementarity of offer, as well as the sharing of common values, will make it possible to accelerate the development of their activity”, indicates the company in its press release.

Founded in 1987, the European leader in image-assisted sales offers turnkey sales spaces called “video corners”, generally located at the end of the shelves of large retail chains, both generalist (Carrefour, Leclerc, etc.) specialized (Castorama, Bricomarché, etc.). The group also offers its products directly to individuals on its e-commerce site or on home shopping channels. Passat references more than 150 products carried by its 10 brands. The Pierre d’Argent, the Gardi Rex garden broom or the Durandal stoves are all products presented in supermarkets and accompanied by their little promotional clips that have made Passat famous.

Outlook clouded by inflation

In November 2020, Passat added a new string to its bow. The group has undertaken a diversification of its activities around the practice of physical activity and sports at home, seeing with a good eye the success of Peleton, the manufacturer of connected exercise bikes, stock market star in favor of confinements of the year 2020. Passat has thus joined forces with an American partner, Echelon US, to form the joint venture Echelon Fit SAS.

For the moment, the mayonnaise does not take, the sports halls having reopened since the launch of this new activity. In the first half of the year, the Echelon activity generated a turnover of 424,000 euros well below the “initial forecasts” of Passat. It results in a loss for the group of 553,000 euros.

In total, Passat generated revenue of €18.45 million in the 1st half of 2022, down 2.1% compared to the 1st half of the previous financial year. Operating profit was also down, at 900,000 euros against 1.68 million euros in the 1st half of 2021. The associated margin fell by 4 points, to 4.9% of turnover against 8.9% as of June 30, 2021. The net income group share is not left out and amounts to 240,000 euros against 770,000 euros in the 1st half of 2021.

For the rest of the year, the prospects delivered by Passat are far from being encouraging. If the company intends to “catch up” in the second half on its historical scope, it is however counting on a drop in sales in France and its other subsidiaries given the rise in prices. Similarly, Passat’s margin and net income will be penalized by the increase in the cost of energy and certain other raw materials.

On its new Echelon Fit connected sports activity, the company intends to continue its commercial efforts to try to reach a level of activity “more in line” with its initial investments.