Geox expects to see “almost double-digit” growth in sales in the first half, as progressive store openings and a positive comparison effect in the second quarter are seen more than offsetting the decline in first-quarter sales.
In the first quarter, continued store closures due to Covid-19 restrictions, a rationalization in the company’s store network and the postponement of some deliveries to April led sales to fall by 18.9 percent to €148.4 million. On a constant currency basis, sales declined by 17.4 percent.
However, in the second quarter to May 9, Geox has seen 165 percent growth in sales for its directly-operated stores (DOS) on a like-for-like basis. In the year to May 9, comparable DOS sales have increased by 3 percent. In the January to April period, Geox’s sales were substantially flat, with wholesale sales up by 9 percent.
Geox results were hardest hit by lockdowns in the second quarter of 2020, which will lead to a positive comparison effect in the second quarter of 2021. Restrictions nonetheless continued to significantly impact Geox’s top line in the first three months of 2021, when 34 percent of DOS were closed, more than double the 15 percent in the same period of 2020. Geox currently has 28 percent of its DOS network still closed, although DOS store openings are expected to be completed by the end of May.
Despite the overall first-quarter sales decline, e-commerce sales soared by 85 percent to reach over 30 percent of total direct sales. E-commerce sales have risen by 51 percent in the year to May 9, as Geox has begun pursuing what it described as a less promotional strategy that has yielded a “relevant” increase in average order value.
Geox also performed well during the quarter in Russia and China, where sales rose by 48 percent and 54 percent, respectively, as business was no longer affected by store closures in these countries. Geox said it is investing in both markets, which it sees as high-potential.
First-quarter sales generated by the wholesale channel amounted to €91.9 million, down by 10.6 percent compared to the year earlier and 8.6 percent lower at constant exchange rates. DOS sales stood at €46.0 million, down by 31.2 percent and 30.3 percent at constant currencies. Geox franchising revenues fell by 20.7 percent to €10.5 million.
On a geographical basis, sales in Italy declined by 30.2 percent to €29.9 million and sales in other Western European markets fell by 20.0 percent to €70.2 million. North America sales decreased by 48.6 percent to €4.6 million and were 45.9 percent lower at constant exchange rates. Sales to the rest of the world increased by 0.7 percent, or 7.7 percent in constant currencies, to €43.7 million.
Footwear sales for the first quarter decreased by 16.9 percent to €135.1 million and were down by 15.6 percent in local currencies, representing 91.1 percent of total sales. Apparel sales amounted to €13.3 million, down by 34.5 percent and 32.0 percent lower at constant rates.
At the end of the first quarter, the company had a total of 835 mono-brand stores, of which 393 were DOS. During the first quarter, six new Geox shops were opened and 38 closed, as the group optimizes its presence in more mature markets and expands in countries where its presence is still limited but developing well.