Geox H1 net sales fall by 4 percent

Wednesday, 01 August 2012

Geox first half 2012 consolidated net sales decreased by four percent (five percent at constant exchange rates) to 528.52247 million dollars (Rs 2,951 crores). Footwear sales represented 87 percent of consolidated sales, amounting to 462.50335 million dollars (Rs 2,582 crores), with a five percent decrease compared to the same period of 2011. Apparel sales accounted for 13 percent of consolidated sales equal to 66.01912 million dollars (Rs 368 crores), with a two percent decrease.

Sales in Italy, the group?s main market, which accounted for 36 percent of sales (38 percent in the first half of 2011) amounted to192.88422 million dollars (Rs 1,077 crores), showing a eight percent decrease. Sales in Europe, which accounted for 43 percent of sales (in line with the first half of 2011), declined by five percent to225.52427 million dollars (Rs 1,259 crores), compared with 236.73274 million dollars (Rs 1,321 crores) in the first half of 2011. North American sales decreased by 4 percent at 31.28518 million dollars (Rs 174 crores) (-10 percent at constant exchange rates). Sales in the other countries increased by eight percent (+5 percent at constant exchange rates).

Analyzing sales by distribution, the Geox Shop channel (franchising and Directly Operated Stores - DOS) increased by eight percent. This channel represented 49 percent of sales (43 percent in the first half of 2011). The sales of Directly Operated Stores (DOS) that have been open for at least twelve months (comparable stores sales) increased by three percent during the first half of 2012. Comparable store sales related to the spring/summer 2012 collections (from February 27 to July 22) increased by six percent. Franchising channel reported an increase of eight percent in the first half of 2012 to117.25784 million dollars (Rs 654 crores), equal to 22 percent of sales. Multibrand, the group?s main distribution channel, accounted for 51 percent of sales (57 percent in the first half of 2011).

Mario Moretti Polegato, chairman and founder of Geox, commented: ?Geox has closed the first half of 2012 with a slight reduction in turnover of four percent in line with expectations. There has also been a good improvement in margins which we have invested in the product, in the development of emerging markets and in communication. The profitability, in percentage terms, is substantially in line with last year and the cash position is solid, at 80 million euro (US$97.4 million or Rs 543 crores). As previously announced, the second half of the year is proving to be difficult due to the economic downturn in Mediterranean countries where the contraction in consumption is most widespread and in the wholesale channel. However, the dynamic development of many countries such as Russia, Eastern Europe and the Far East, the new direct store openings in China and Hong Kong and the encouraging trend in sales at our direct stores in general, showing comparable growth of six percent in the spring/summer season, confirm the validity of our growth strategy focused on these emerging markets and on opening new retail stores."

As of June 2012 the overall number of Geox Shops was 1,172 of which 261 were DOS. New openings include shops in Rome, Amsterdam, Paris, London, Madrid, Budapest, Hong Kong, Tianjin.