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The global fashion business journal

Jan 24, 20209:47pm

Desigual decreases its benefit 93% in 2018 but recovers in the first half

Ranked as the fourth biggest fashion group in Spain and lead again by its founder, got a revenue of 655 million euros last year, 14% less and earned 3.4 million euros.

Jul 26, 2019 — 9:00am
Pilar Riaño/ Iria P. Gestal
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Ranked as the fourth biggest fashion group in Spain and lead again by its founder, got a revenue of 655 million euros last year, 14% less and earned 3.4 million euros.

 

Desigual suffers in the breakup year with Eurazeo. The company has finished 2018, its fourth year of transformation with a 14% drop in its sales, up to 655 million euros, not reaching the 700 million euros barrier for the first time since 2011. The benefit sank 93%, up to 3.4 million euros, compared to 47 million euros last year.

 

The ebitda reached 63.5 million euros 46.6% less than last year. The positive side for the company was its online channel, that continue to grow and represents 12.7% of its sales. The financial situation of the company its still on the positive side, with more than 150 million euros in cash and without debts.

 

Alberto Ojinaga, managing director of the company, states that 2018 has been worse than forecasted, which has made him speed the company’s transformation plan.

 

 

 

 

This process started to have results in the first half, in which the group has damped the fall in its sales and recover profitability. As matter of fact, Ojinaga points that the fist half of the year went better than expected.

 

Between January and June, the company earned 290 million euros, 10% less than in the same period last year. The drop, according to Ojinaga, is because of closings, but in comparable terms, sales have finished the first half in rise. Online keeps going forward, reaching 14.1% of the entire revenue.

 

The benefit has reached seven million euros, with an ebitda of 27 million euros. In the middle of its transformation, that goes through rebranding, product and distributing, the company has followed its closings as planned, and will continue doing it until the end of the year.

 

 

 

 

In 2018, Desigual closed 31 stores, own and franchises. The openings on the other hand rised to 18 (six owned and twelve franchises). The company closed its fiscal year with a total of 386 stores, managed by them and 124 franchised. The company plans to speed its reorganization process this year, with more than 43 closures.  

 

In what’s gone of the year, the company has also made its rebranding, with a new logo, which goal is to return to its origins and reach a younger audience.

 

Speed and radicalization, according to Ojinaga, happens right after that Eurazeo dropped its capital in the company. Last August, Thomas Meyer, founder of the Spanish company, re bought the group for an unknown amount.  

 

After the operation, Meyer decided to focus in creative direction and placed Ojinaga in the executive side. The company restructured its executive committee, adding new talents in human resources and marketing.

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