Revenue for footwear brand Geox down 6.5% in 2018, e-sales up 12%
Geox had a troubled year in 2018. The Italian footwear brand, known for the ‘shoes that breathe’, reported a revenue of €827.2 million for the 2018 financial year, equivalent to a 6.5% downturn (-5.5% at constant exchange rates). The year started very badly, with an 11.2% shortfall in the first quarter, and ended with a slight improvement, after the fourth quarter posted a 2% revenue rise. The recovery was driven chiefly by the strong performance of Geox’s online business (+12% in 2018 as a whole, and +22% in the fourth quarter). EBITDA fell to €38.3 million, compared to €64 million in 2017. The group's net income was in the red at -€5.3 million, compared to €15.4 million a year earlier.
In terms of distribution channels, the wholesale channel (worth 44.7% of revenue) lost 7.8% (-6.6% at constant exchange rates), while Geox’s monobrand stores, accounting for 43.4% of sales, remained relatively stable at -0.9% (+0.1% at constant exchange rates). Sales by franchised stores fell by 19%, down to €98.3 million, as 55 stores were closed in the course of 2018.
Italy, which accounts for 29% of the group's revenue, lost 6.9%, generating €239.8 million, as the brand’s monobrand store network was rationalised, with 18 closures in 2018, and also due to exceptional weather conditions. The rest of Europe (42.9% of total revenue) lost 7.4%, with a revenue of €354.7 million, and North America lost 11.2%, with €50.5 million.
Product-wise, footwear, which accounts for 90% of sales, recorded a 6.6% decrease, down to €744 million, while ready-to-wear lost 5.3%, with sales of €83.2 million.
Mario Moretti Polegato, the president of Geox, stated: “With the new 2019-2021 strategic plan, Geox has embarked on a thorough strategic, organisational and distributive overhaul, thanks to the addition of new, highly experienced managers, coming from the industry's leading corporations. (…) The first positive returns were felt in the last months of 2018. Retail sales have slightly improved chiefly thanks to e-commerce, which Geox has been managing internally since July 2018, and there is growing media interest in our brand, both on traditional media and on the main social media, also thanks to targeted marketing investments, such as the Geox Dragon project in Formula E and our work with key influencers.”
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