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Geox announces first half results

Sep 1, 2020 Italy
Geox announces first half results
Preliminary consolidated sales in the first half of 2020 amounted to 243.6 million euros, down by 39%. The group's direct e-commerce channel recorded significant growth with more 40% compared with the end of June 2019
“After the year got off to a good start, with our stores recording positive sales up until the start of February 2020, COVID-19 has had, and continues to have, significant health, economic and social repercussions on a global scale (...) Innovation, sustainability and digitalisation will be increasingly important for companies if they want to meet the demand of more careful and selective consumers who pay close attention to the value and sustainability of their shopping experiences. Geox is dealing with these exceptional circumstances, fully aware of the ongoing difficulties and changes involved yet paying close attention to the potential opportunities that this situation may present for a group as solid and important as ours", commented Mario  Moretti  Polegato,  Chairman  and  Founder  of  Geox.

First Half Performance

Preliminary consolidated sales in the first half of 2020 amounted to 243.6 million euros, down by 39% compared with the previous year (-39% at constant forex), affected by the spread of the Covid-19 pandemic. Sales generated by wholesale stores, representing 49.8% of the group revenues (46.5% in the first half of 2019), amounted to 121.4 million euros (-34.6%  at  current  forex, -34.7%  at  constant  forex), compared with 185.8 million euros in the first half of 2019. The trend during the first half of the year was fully down to the temporary closure of wholesale stores for approximately two months. Sales in the franchising channel, accounting for 7.3% of group's revenue, amounted to 17.8 million euros, reporting a decline of 53.0% (-52.9% at constant forex), compared with 37.9 million euros in the first half of 2019. Sales generated by directly operated stores (DOS), representing 42.8% of Group revenues, amounted to 104.4 million euros, compared with 175.8 million euros in the first half of 2019 (-40.6% at current forex, -40.7% at constant forex). Like-for-like  sales at the end of June 2020 were equal to -41%, substantially in line with the overall trend for this channel with this  figure reflecting  the  high percentage of stores that were temporarily closed during the first six months of the year (around 35%). As of the date of the announcement, only four stores remained closed.

Further recovery has been recorded so far in July (-29% to date), despite the basis for comparison being penalised by the postponement of the summer sales in many significant markets. The group's direct e-commerce channel continues to record significant growth: +40% compared with the end of June 2019 (+21% in the first quarter and +59% in the second quarter). Particularly positive performance was recorded in April (+102%) and May (+167%), coinciding with the most severe phase of the lockdown; performance in June, on the other hand, albeit still positive (+12%), was affected by the reopening of stores absorbing some of the sales.

Performance by Geography

Sales generated in Italy, representing 24.6% of the group's revenues (29% in the first half of 2019), amounted to 59.9 million euros, compared with 116.2 million euros in 2019. Performance in Italy was more seriously affected by the COVID-19 emergency than in other European countries, as this was  the  first country in the  area where the epidemic began to spread and is also the country where the group has the highest number of stores (150 DOS and 108 franchises). Sales generated in Europe, representing 46.7% of the group's revenues (43.8% in the first half of 2019), amounted to 113.8 million euros, compared to 174.8 million euros in the first half of 2019, recording a decline of 34.9%. North America recorded turnover of 11.8 million euros, down by 46.6% (-47.1% at constant forex). The period of closure was longer in the USA and Canada, starting from mid-March and lasting until mid-June. The entire network is now operational, with the exception of the store in New York, as mentioned above. A 32.7% reduction in turnover was recorded in the Rest of the World compared with the first half of 2019 (-32.4% at constant forex), with a particularly different trend between the Asia Pacific area and Eastern Europe. In China, Hong Kong and Macau, there was a particularly significant reduction in turnover (over 40%) due to the restrictions on people’s mobility and the closure of stores at the end of January/start of February. Stores reopened at the beginning of March, but with a strong reduction in footfall. From the beginning of April until mid-May, stores in Japan were temporarily closed, following the containment measures imposed by the government to reduce the spread of the pandemic. Overall, sales generated by directly operated stores recorded around a 40% drop at the end of the first half of the year, with an average reduction in footfall of 55%.

Performance by Product

Footwear sales represented 90.5% of consolidated sales, amounting to 220.5 million euros, down by 39.5% compared with the first half of 2019 (-39.5% at constant forex). Apparel sales represented 9.5% of consolidated sales, amounting to 23.1million euros, compared with 35.2 million euros in the first half of 2019 (-34.3% at current forex, -34.0% at constant forex).

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