Adolfo Domínguez posts 50.4% decline in first-half revenues
The Covid-19 pandemic continues to take its toll on the fashion industry. The latest Spanish company to feel the sting is Adolfo Domínguez, which ended the first half of its fiscal year on 31 August with losses of 10.4 million euros, a figure almost six times larger than the loss of 1.8 million euros reported by the company in the same period in the previous year.
During the first six months of the year, Adolfo Domínguez was strongly affected by the economic crisis and temporary store closures caused by Covid-19. The Galician company reported total revenues of 26 million euros, reflecting a decline of 50.4% compared to the prior-year period. Furthermore, EBITDA was negative 3.7 million euros, compared to positive 3.3 million a year ago.
As has been the case with a number of other companies in the sector, the online channel gave space for a degree of optimism. In the second quarter, Adolfo Domínguez's sales rose 187% year over year, a figure which the Ourense, Spain-based company attributed to the gradual reopening of its brick-and-mortar stores, as well as the strong performance of its digital sales.
E-commerce revenues grew 25.5% compared to the prior-year period, representing 21.8% of the company's total sales. In order to strengthen this channel, Adolfo Domínguez reworked its online store in September and has also launched its "ADN" AI project, which was presented when the company reported its annual financial results.
"Global confinement measures implemented in Spring 2020 resulted in a parenthesis in our company's upward trajectory towards profitability," said the company's managing director, Antonio Puente, in a release published on Wednesday, 25 November. "The full March-August period was far below our usual figures. Currently, 91% of our retail network is active," he added.
Brick-and-mortar transformation and new international management
In parallel, the Galician company has revealed plans to "optimise" its brick-and-mortar network, a process which will involve shuttering 11 duplicate stores in Spanish provinces and amortising 20 points of sale run by Gin Group in Mexico, following the termination of the companies' partnership. Over the last month, Adolfo Domínguez has opened one new store in Colombia and another in Portugal. Currently the brand sells is products in 351 points of sale in 20 countries, and employs 1,209 people.
To head up its overseas operations, Adolfo Domínguez has also announced the appointment of Anabel Rúa López as its new international director. The executive arrives at the brand from Parfois, where she led international expansion and oversaw the company's franchise network. With two decades of experience in the industry, she has also previously served in management positions in Inditex's international business.
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