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Geox: sales still impacted by stores closure

May 19, 2021 United States
Geox: sales still impacted by stores closure
During the first three months of the year, over one third of the network stores by Geox, were temporarily closed due to lockdowns, with a particularly significant suspension of activities in the main markets (Italy, France, Germany and the UK)
Consolidated sales in the first quarter of 2021 amounted to 148.4 million euros, down by 18.9% compared with the first quarter of 2020 (-17.4% at constant forex). A performance affected by a number of temporary factors such as the high percentage of stores temporarily closed due to the lockdowns. The drop in sales caused by the ongoing rationalisation of the store network also had an effect on the results for the first quarter of 2021 (-115 stores compared with the first quarter of 2020).

Sales generated by wholesale stores, representing 62.0% of the group's revenue (56.2% in the first quarter of 2020), amounted to 91.9 million euros (-10.6% at current forex, 8.6% at constant forex), compared with 102.9 million euros in the first quarter of 2020. Sales in the franchising channel, accounting for 7.1% of the group's revenue, amounted to 10.5 million euros, reporting a decline of 20.7% (-19.6% at constant forex), compared with 13.2 million euros in the first quarter of 2020.

Sales generated by directly operated stores (DOS), representing 31.0% of the group’s revenue, amounted to 46.0 million euros, compared with 66.8 million euros in the first quarter of 2020 (-31.2% at current forex, -30.3% at constant forex). Like-for-like sales performance of -15% was recorded at the end of the firts three months of 2021, reflecting the high percentage of stores that were temporarily closed during the quarter (around 34% on average compared with 15% in the first quarter of 2020) and the reduction in footfall caused by the restrictions on people’s mobility.

Sales in the first quarter of 2021 were also significantly affected by the rationalisation of the store network (approximately -5 million euros in terms of sales), down from 454 DOS in March 2020 to 393 at the end of March 2021. Since stores have gradually begun to reopen, performance is progressively recovering.

Sales by Region

Sales generated in Italy, during the first three months of the current year, representing 20.2% of group’s revenue (23.5% in the first quarter of 2020), amounted to 29.9 million euros, compared with 42.9 million euros in the first quarter of 2020 (down by 30.3%). Performance in Italy has been more seriously affected by the impacts of COVID-19 (around 40% of stores were temporarily closed during the period). The performance in the firts quarter of the current year was also affected by the rationalisation of the store network over the last 12 months (50 net closures, equal to 20% of the network). To date, all stores are now open Monday to Friday, while 77 stores remain closed at weekends (57% of the total). Performance of the e-commerce channel was particularly impressive, recording +55% at the end of March.

Sales generated in Europe, representing 47.2% of group’s revenue (47.9% in the first quarter of 2020), amounted to 70.1 million euros, compared to  87.6 million euros at the end of March 2020, recording a decline of 20%, mainly due to the effects of the spread of the pandemic, which led to stores being temporarily closed (an average of over 50% of stores were closed during the period). To date, 75 directly operated stores are still closed (55 in France and 20 in Germany), equal to 54% of the total. Like-for-like sales in directly operated stores closed the quarter down by approximately 17%. The direct e-commerce channel for the European market recorded 98% growth. With regard to the wholesale channel, performance was in line with the group's figures.

North America recorded a turnover of 4.6 million euros (3.1% of revenues), down by 48.6% (-45.9% at constant forex). To date, 10 stores are still closed due to the pandemic and these are expected to reopen on the 20th of May. During the first quarter of 2021, LFL sales performance for directly operated stores was down by approximately 18%. Thee-commerce channel recorded 88% growth.

A turnover of 43.7 million euros was recorded in the Rest of the World (29.5% of turnover vs. 23.7% in the first quarter of 2020), up by 0.7% compared with simialr period in the previosu year (+7.7% at constant forex). In China, Hong Kong and Macau, the entire network was operational during the first quarter and remains so today. China recorded particularly impressive performance (+54% in terms of overall turnover and +77% in terms of LFL sales generated by directly operated stores). With regard to Eastern Europe, excellent performance continued to be recorded in Russia (+48% vs. Q1 2020 and +21% compared with the first quarter of 2019); sales generated in Russia accounted for 11% of the group total at the end of March (6% in the first quarter of 2020). Directly operated stores in the entire area (Eastern Europe) recorded a 29% increase in LFL sales, with the e-commerce channel recording +109%. The entire distribution network is currently operational also in Eastern Europe. The wholesale channel also recorded positive performance (+6.5%).

Sales by Product Category

Footwear sales represented 91% of consolidated sales, amounting to 135.1 million euros, down by 16.9% (-15.6% at constant forex) compared with the first quarter of 2020. Apparel sales represented 9% of consolidated sales, amounting to 13.3 million euros (-34.5% at current forex, -32.0% at constant forex), and were more seriously penalised by the lockdowns and seasonal factors.

Store Network

As of the 31st of March 2021, there was a total of 835 Geox Shops, of which 393 DOS. During the first quarter of 2021, 6 new Geox Shops were opened and 38 were closed.

Image credits: www.mffashion.com

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