The decrease in sales of the Italian brand of shoes Geox in the first quarter of 2019 amounted to 1,3% excluding currency fluctuations (and 1,6% including currency fluctuations). The reduction in sales is primarily associated with the reorganization processes that are carried out by the Geox group in retail and wholesale channels, writes Worldfootwear.com
“In the first three months of 2019, Geox recorded a slight decrease in sales compared to last year. At the same time, the indicator of comparable sales like for like increased due to our own branded stores, especially in the electronic trading channel, which was offset by a decrease in indicators in the wholesale and franchised channels. The latter was influenced by the rationalization process, which aims to strengthen the company's image, support the brand and optimize the presence of the brand’s retail stores, ”said Matteo Mascazzini, managing director of the company.
Consolidated sales in the first quarter of 2019 year fell to 260,9 million euros compared to 264,5 million euros in the first quarter of 2018 year.
Sales in the franchising channel, accounting for 14% of the group’s revenue, amounted to 36,8, decreasing by 12,9%. This indicator is due to the process of restructuring the retail chain, which was carried out by the group in the last quarters, with reduction of stores by 10%, closing them or transferring franchised outlets to their own management.
The revenue of retail under its own brand management currently stands at about 32% of the group’s revenue, in the first quarter of 2019 it reached 83,8 million euros, an increase of 5,8% (4,9 when accounting for currency fluctuations). This growth was mainly due to good comparable sales (+ 3,4%). Significant growth (+ 25%) is also shown by the e-commerce channel.
About 31% of the group’s sales is accounted for by the native Geox Italy, sales in this region decreased by 4,1% in the reporting period. About 43% of Geox’s revenue is in Europe; in the first quarter of 2019, the group’s revenues in the European region amounted to 112,7 million euros, compared to 113,9 million euros in the first quarter of 2018, declining by 1% (1,1%, taking into account exchange rate fluctuations).
Geox sales in North America in the reporting period amounted to 10,7 million euros, decreasing by 9,8% in the current currency and 13,1%, taking into account exchange rate fluctuations, mainly due to the reorganization of the group in the wholesale channel, careful analysis and selection of partners, with a focus on compliance partners adopted by the group strategy. Sales in other regions of Geox's presence increased by 3,8%., With double-digit growth in comparable like for like sales in its own retail and wholesale channels in Eastern Europe.
A significant increase in wholesale channel sales was observed in the Asia-Pacific region, with a slight decrease in their own points of sale.
Shoe sales in the reporting period amounted to 91% of the group’s total sales - 236,5 million euros, decreasing by 1,4% (1,8%, taking into account currency fluctuations) compared to the results of the first quarter of 2018.
Clothing sales accounted for 9% of the group’s total sales, reaching 24,4 million euros, against 24,6 million euros in the same period a year earlier.
As of March 31, 2019, the global retail chain of Geox consisted of an 991 store, of which 444 were their own. In the first quarter of 2019, 16 new Geox stores were opened and 40 stores were closed.