The management board of CCC, the Polish shoe manufacturer and retailer, has announced new ambitious growth objectives through 2022. It said that it plans to increase its sales to an annual level between 8.5 billion and 9.0 billion zloties, around €2 billion, by the end of 2022.
At the same time, CCC’s new management wants the operating margin (Ebit) to recover, rising to 8.5-9.5 percent by 2022, resulting in a net margin to 7-8 percent. The operating margin has been declining sharply in recent years, going down from 10 percent of sales in 2017 to 8 percent in 2018 and a predicted level of 2 percent in 2019.
In 2019, CCC recorded total sales of around €1.35 billion, up from €460 million in 2014. That was three times more than in 2004. While it now has a presence in a total of 29 countries, partly through franchises and online stores, the company regards itself as the leader in footwear retailing in Central and Eastern Europe, with a market share of around 20 percent in six markets, but it wants to grow, especially in the online space. According to the company, the market is worth nearly €5 billion in those six markets and is expected to grow in the next few years at an annual rate of 2 percent offline and 19 percent online.
The development of the group’s online business plays an important role in CCC’s future strategy. Its online business is due to represent between 35 and 40 percent of total sales by the end of 2022, compared with roughly 25 percent at the end of the last year. Its main online platform, eobuwie. pl, is expected to reach revenues of PLN 3 billion (€706.4m-$765.8m), delivering an Ebitda margin of 8 to 10 percent.
According to CCC, the online penetration of shoe retailing is expected to grow from 11 to 21 percent in Central and Eastern Europe. This would compared to growth of 18 to 27 percent of sales in Western and Northern Europe, and 5 to 9 percent of sales in Southern Europe.
Using complementary channels as well, such as hybrid offline-online stores and tools like mobile applications and esize.me scanners, CCC said the group wants to continue the development of its multi-channel strategy on an organic basis, responding to market trends such as increased customer mobility and climate change, backed by the growing popularity of its own product range.
It plans to strengthen its offering around five or six core private shoe labels including Lasocki, Gino Rossi and Sprandi. It will expand the range of its environmentally friendly products, reducing CO2 emissions and working in cooperation with suppliers who have committed to observe its Code of Conduct.
The company wants to improve the agility and efficiency of its operations with a strong consumer orientation in terms of finance, logistics, marketing and other operations, accelerating inventory turnover and allocating products in a timely manner.
It wants to reduce its debt and shorten the cash conversion cycle to below 100 days by the end of 2022. The annual capital investment budget will be reduced to a range of 150 million to PLN 200 million (€47.1m-$51.1m) from last year’s level of PLN 700 million.
At the beginning of 2019, CCC acquired a 30 percent stake in the Hamm Reno Group from Osnabrück. CCC has the option to increase its stake in the German shoe retail chain until Jan 31, 2021. More recently, it bought a 90.02 stake in another Polish shoe company, Gino Rossi. Page 6