Geox: on the road to recovery
After a horrible 2013, Geox has begun to see the light at the end of the tunnel. During the first half of 2014, the Italian footwear brand confirmed the timid recovery that it had begun earlier this year with sales rising by 3.5% (4.1% at constant exchange rates) compared to the same period a year earlier, to 400.2 million euros.
It has had a pleasant surprise in particular in Italy, which has remained Geox’s largest market (33% of total turnover). Sales increased by 9.2% to 133.7 million, while they had fallen by 21.8% in the first half of 2013.
In the rest of Europe, sales grew by 2.4% to 176.8 million, while they remained down across the Atlantic at -7.4% and fell by 0.1% in other areas of the world, the company said in a statement.
The "shoe that breathes" also performed well in its own stores. Sales through 471 branches jumped 24.9% to 163.8 million in the first six months of the year (on a comparable basis, the increase was nearly 8.2%). However, in multibrand and franchise stores, the group saw respective declines of 9.3% and 3.6%.
As of June 30, 2014, the overall number of Geox totaled 1,270. During the first half, 72 stores were closed as part of a plan to streamline the company’s sales network, while there were 43 new openings.
From a profitability point of view, the company is still struggling. Geox’s net loss deepened in the first six months of the year at 3.9 million euros as opposed with a loss of 3.6 million dollars a year earlier.
Meanwhile, its operating profit (EBIT) and earnings before interest, tax, depreciation and amortization (EBITDA) remained more or less stable over the same period, rising from 0.2 to 0.1 million and from and from 21.9 to 20.7, while they had floundered in the first half 2013.
In this context, management remains confident as regards the rest of the year and confirms the objectives of its industrial plan, aiming in 2014 for a return to stability for its operating profit and for a turnover of about 800 million euros.
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