Geox Group recorded sales decline in the first half of 2018 year

In the first half of the 2018, the revenue of the Geox group reached 414 million euros, which is 8,2% less than in the same period of the 2017 year. Such indicators mean that on an annualized basis, the group’s sales decline will be about 9,5%, writes Worldfootwear.com

Geox consolidated sales in the first half of 2018 amounted to 414,1 million euros, which is 8,2% less than the previous year. The result of the first half of the year was affected by weak brand sales in the first quarter of the 2018 year, due to low demand during the sales period and the delayed start of the spring period, as well as the Geox brand retail optimization program, especially with respect to franchised stores, the number of which decreased by 20 % for the last 18 months.

Wholesale Sales

Wholesale sales amounted to 46% of Geox revenue (45% in the first half of 2017 of the year) and reached 191,2 million euros. The decline in wholesale sales in the first half of the 2018 year is primarily due to a more selective policy in choosing partners, a decrease in sales of goods from past collections offered at a discount (as a result of a significant reduction in stocks in the 2017 year), as well as an unfavorable exchange rate. In the second quarter, positive dynamics was recorded in the group's wholesale sales (+ 10,6% compared to sales in the second quarter of 2017 of the year), due to the restoration of supplies to customers, as some customers requested to delay deliveries in the first quarter due to the delayed start of the spring season.

Sales in the brand’s own retail

About 42% of the company's revenue is accounted for by sales of its own retail network. In the reporting period, sales in Geox own stores decreased to 174,4 million euros (-3,8% in the current exchange rate, -2,1% excluding currency fluctuations). The result was affected by reduced sales of goods at a discount in January and February (stocks were optimized in 2017 year) and cold March. Sales rose in the second quarter of 2018 and were comparable to sales in the same period a year earlier.

In the brand’s own retail, sales went up in mid-April, thanks to the return of warm weather in most markets where Geox was present. In July, the positive dynamics of sales was also recorded, thanks to good sales at the beginning of the summer period.

Sales in franchising stores

Franchised retail sales account for 12% of the group’s revenue, and in the first half of the 2018 year reached 48,5 million euros, decreasing by 28,5%. In this case, the decrease in sales is associated with the optimization of the retail network in the last quarters of the 2017 year, when the 62 stores were reduced and at the beginning of the 2018 year, when 34 stores were closed (approximately 20% of the number of stores in the brand’s franchised network).

About 30% of the Geox group's revenues came from sales in Italy (also 30% in the 2017 year), reaching 124,3 million euros in the reporting period, compared to 137 million euros in the first half of the 2017 year (9,3%). In the second quarter of 2018, there was a positive dynamics in sales compared to the same period in 2017 (both in the wholesale channel and in stores with direct control).

Sales by region

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Sales in Europe accounted for 43% of Geox revenue (44% in the first half of the 2017 year), in the first half of the 2018 year, European Geox sales reached 179,9 million euros, compared to 198,9 million euros in the first half of 2017 year, decreasing by 9,6 % The reason, again, is the optimization of the retail chain mentioned earlier and a significant reduction in the number of stores, as well as the cold spring. In the second quarter, the sales situation improved both in the wholesale channel and in the brand’s own retail.

A sales turnover of € 24,1 million was recorded in the North American market, with sales declining by 15,1%. In many respects, the result was influenced by the active work of the wholesale channel development group, with careful selection by the partner and focus on improving brand perception.

Sales by Category

In the volume of consolidated sales of the 91 group, sales of shoes account for 376,7 million euros in the reporting period, decreasing by 7,7% compared to the same period in 2017.
Clothing sales, which represent 9% of total sales, amounted to 2018 million euros in the first half of the 37,4 year compared to 42,9 million euros in the first half of the 2017 year (-12.9% including currency fluctuations, -12.5% excluding currency fluctuations).

Geox Is an Italian brand of shoes, clothing and accessories in the mid-price category. Founded in 1995. The brand is known for its unique developments that are used in the manufacture of shoes, they create the effect of protecting shoes from moisture and provide natural thermoregulation and breathability. Geox Group develops a network of branded stores that are open in different countries of the world. As of June 30, 2018, the Geox retail chain consisted of 1040 stores, of which 436 were franchised. In the first half of 2018, 19 new Geox stores were opened, with 74 existing stores closed, in line with a plan to optimize retail in mature markets and expand the network in countries where the group's presence is still limited but has a good track record.