Geox counts on emerging from red this year

By

Bruno Joly

Published
May 16, 2014

In 2013, Geox plunged into the red. For this year, its leadership nevertheless expects to break even at the operational level and for sales to increase slightly to approximately 800 million euros.

For its first quarter of 2014, Geon has already returned to growth, however slight it may be. The brand saw sales rise by 2.3% and by 3% at constant exchange rates to 268.5 million.

Last year over the same period, sales fell by more than 20% with trouble mainly in Italy and Spain. This time, on the domestic market, sales are up 8.3 % at more than 97 million euros. In other EU countries, they remain stable at 116 million.

They are down on the other side of the Atlantic by 4.8 % at constant exchange rates and in other areas of the globe, they appear to have dropped by 1%, although they are up by 2.8% at constant exchange rates.

Continuing on to product categories: apparel saw sales jump by nearly 11%, making up 13.6 % of total business, while footwear rose by only 1%.

Like many brands, Geox bases its success on its directly operated stores. Sales generated via 455 branches jumped 45.2% to 77 million with comparable store sales increasing by nearly 20%.

As regards multi-brand and franchise stores, however, the group saw respective declines of 9.4% and 6.9%.

In terms of profit, it will be a long and difficult road. Earnings before interest and taxes rose over the course of a year from 30 million to 17 million euros. As for the rest of 2014, management is confident mainly because of a combination of pricing policies, limited promotional sales, as well as a reduction in the complexity of its supply chain. The branch network, however, should expand by only 20 stores this year.