Restoque’s restructuring strategy impacts Q3 sales growth

Third quarter revenues at Restoque Comércio e Confecções de Roupas S.A. totalled 271.9 million Brazilian real (64.8 million dollars), down 3.4 percent, which the company said were impacted by the actions taken by the company to eliminate channel conflicts and reinforce the positioning of its brands, strengthening the foundations for sustainable growth. With its store base at 255 stores, the company’s same store sales decreased by 20.9 percent. Gross profit in was 133.2 million Brazilian real (31.7 million dollars), down 30.4 percent, with a gross margin of 62.8 percent, improvement of 1.9 pp, and in the year to date the company reached a gross margin of 64.7 percent, up 0.8 pp.

Restoque brands report drop in same store sales

The company added that Dudalina and Le Lis Blanc brands were strongly impacted by the reduction in promotional sales volume in September, which accounted for more than 76.8 percent of the channel’s decline in the quarter. Dudalina was the brand most affected by this process, with the elimination of promotional sales during September, which largely accounted for a 49.8 percent same store sales reduction in the quarter. Le Lis Blanc was also significantly impacted by the reduction in promotional sales in September, registering a same stores sales decrease of 20.6 percent. Bo.Bô achieved stability in same store sales and an increase of 11.1 percent in sales per m2. Other brands registered growth in same store sales and sales per square meter, with John John having same stores sales 7.9 percent or 15.3 percent in sales per m2 and Rosa Chá had same store sales of 42.9 percent or 55.8 percent in sales per m2.

In line with the company strategy, promotional sales volume of 31 physical outlet stores operating under the Estoque brand was limited, as a result, the chain recorded same store sales drop 0.4 percent and an increase in the average ticket of 2.4 percent.

Restoque’s wholsale channel sales improve 11.3 percent

Restoque said, wholesale channel sales, excluding sales to third party online channels, grew 11.3 percent in the third quarter, positively impacted by the actions of the first half of 2019, with greater control of promotional periods and reduction of promotional sales. As in the company’s own online channel, the company expects sales to recover in this channel in 2019 and 2020, offsetting the loss of revenue for third party online channels, with healthy growth in sales to multi-brand stores. Le Lis Blanc’s wholesale channel sales grew 32.1 percent. Similarly, wholesale order sales model was adopted by the John John and Dudalina brands, resulting in sales growth of 91 percent for the first 2020 collection compared to this brand’s first 2019 collection. Consolidated wholesale revenues fell from 115.6 million Brazilian real (27.5 million dollars) in 3Q18 to 25.9 million Brazilian real (6.1 million dollars) in 3Q19,

In the third quarter, online channel sales totalled 19.8 million Brazilian real (4.7 million dollars), representing 7.3 percent of the company’s total revenue in the period and an increase of 137.2 percent over 3Q18. Online channel sales grew 137.2 percent over 3Q18.

Picture:Rosa Chá website