Geox posts stable net sales growth in FY17, names ex-Gucci executive its new CEO

Geox S.p.A., in a statement announcing unaudited preliminary results for the year said that consolidated net sales amounted to 884.5 million euros (1,084.5 million dollars), down 1.8 percent at current and down 1.7 percent at constant forex, with the growth of the wholesale channel partially compensating for the planned optimization of the mono-brand store network. The company also announced resignation of the current CEO Gregorio Borgo and appointment of Matteo Mascazzini as the company’s new CEO.

“The expected figures for 2017 reflect the first concrete results of our new strategy focused on boosting profitability and achieving a healthy and profitable business,” said Mario Moretti Polegato, the company’s Chairman in a statement, adding, “On behalf of the entire board, I would like to thank Gregorio Borgo for his commitment and valuable contribution to the company, for the projects undertaken and for the results achieved this year. I also welcome Matteo Mascazzini who will be the new CEO with effect from February 1, 2018.”

Review of Geox’s preliminary results

Wholesale revenues, representing 45 percent of group revenues amounted to 401 million euros (491.7 million dollars), up 1.4 percent at current and 1.6 percent at constant forex. This trend, the company said, is due to a substantially stable performance in Italy and in the rest of Europe, double-digit growth recorded in Russia, Eastern Europe, China and by the online channel.

The company added that sales of the DOS channel, which represent 41 percent of group revenues, declined to 362.1 million euros (444 million dollars), down 2.3 percent at current and 2.1 percent at constant forex due to the planned network optimization in Europe and expansion in more responsive markets such as Russia, Eastern Europe and China with overall 16 net closures, stable LFL sales growth of 0.5 percent generated by the directly operated stores against 1 percent decline in 2016.

Sales of the franchising channel, which account for 14 percent of the group revenues, amounted to 121.4 million euros (148.8 million dollars), with a decrease of 9.8 percent at current and 10.3 percent at constant forex due to 62 net store closures and decline in comparable sales. At December 31, 2017, the overall number of Geox shops was 1,095 of which 439 were DOS. During 2017, 70 new Geox Shops were opened and 136 were closed in line with the rationalization plan.

Geox performance across geographies

Sales in Italy, which accounted for 29 percent of sales and reached 257.5 million euros (315.7 million dollars) compared to 270.1 million euros (331 million dollars) in 2016. This trend, the company said, is mainly due to 48 net store closures, the slight reduction in LFL sales recorded by DOS and a stable wholesale channel. Sales in Europe, which accounted for 43 percent of group sales, amounted to 382.9 million euros (469 million dollars), compared to 396.6 million euros (486 million dollars) in 2016. The 3.4 percent decrease is again due to 36 net store closures, slight increase in the LFL sales recorded by DOS and a stable wholesale channel.

North American sales amounted to 56.9 million euros (69.7 million dollars), down 6.2 percent or 5.6 percent at constant forex due to the performance on the Canadian market, the stable LFL sales recorded by DOS and closure of 6 monobrand stores. Sales in other countries, Geox added, increased by 8 percent or 7.9 percent at constant exchange rates with positive performance both in the wholesale channel and in terms of LFL sales recorded by DOS with a particularly strong growth in Russia, Eastern Europe and China.

Footwear sales represented 90 percent of consolidated sales amounting to 796.7 million euros (976.8 million dollars) were down 2.3 percent or down 2.1 percent at constant forex. Apparel sales accounted for 10 percent of consolidates sales at 87.9 million euros (107.7 million dollars), increased 3.1 percent at current and 3 percent at constant forex.

Matteo Mascazzini named new CEO of Geox

Mascazzini, the company said, brings a twenty-year career experience in the global fashion and luxury industry, with experience in retail and international development. He comes from the Gucci Group where, for over ten years, he held leading roles in EMEA, US, Japan and Hong Kong and in the retail and consumer management. Previously, from 2003 to 2007, he was COO/CFO in the US and Japan for Giorgio Armani and, from 1995 to 2002, for Gianni Versace Group he held the position of controller in the US and then in the group.

Picture:Geox website