After another very weak quarter attributed to the economic crisis in Europe, especially in the Mediterranean countries, Geox expects to finish 2013 with a 6.5-7.0 percent drop in sales to €750-755 million, a gross operating (Ebita) margin of 3.0-3.5 percent and a negative Ebit margin of around 2.0 percent. The net loss could amount to around 4.0 percent of revenues.

But thanks to the rationalization of its distribution network, new products, higher online sales and expansion in China, Hong Kong, Northern and Eastern Europe, plus cost-containment measures, the management believes the company will be able to achieve much higher sales of €985 million by 2016 with an Ebitda margin of about 11 percent, or Ebitda of around  €110 million against a projected €25 million this year.

In the past year, Geox' sales had fallen by 9.0 percent to €807.5 million. The adjusted Ebitda margin had dropped to 10.6 percent, excluding non-recurrent costs, and the company had booked a net profit of €10.0 million, down sharply from €50.0 million in 2011.

A financial analyst said that the company's sales targets for the next years are higher than those projected by the market. Geox's share price closed nearly 2 percent higher last Friday, after the new business plan was released. The group is budgeting a sales increase of 6 percent to €805 million for next year, with the Ebitda margin at 5 percent and the Ebit margin at a breakeven level. That compares with a consensus of financial analysts' estimates projecting revenues of €790 million in 2014, but with an Ebitda margin of over 8 percent.

For 2015, Geox expects to reach an Ebitda margin of 8 percent and an Ebit margin of 4 percent on sales of €887 million. During the three years of its new business plan, the group would maintain a relatively steady level of investments. Capital expenditures would peak at €45 million in 2014, against €40 million this year, and stabilize at  €42 million a year for both 2015 and 2016. About €25 million in investments are earmarked every year for the opening and restyling of Geox stores.

Footwear and apparel are expected to enjoy similar growth rates, so that shoes would continue to represent 86 percent of total revenues through to 2016. Footwear revenues are seen reaching €654 million this year; €690 million in 2014; €764 million in 2015 and €850 million in 2016. The company aims to boost sales through the launch of new and innovative products. It will also develop further its winter collections to expand in the northern hemisphere.

The apparel turnover is forecast at €102 million in 2013, €115 million in 2014, €123 million in 2015 and €134 million in 2016. Geox will focus on outerwear jackets and the development of the wholesale channel. The apparel business will be supported by a dedicated sales force.

After a sharp drop expected for this year, the group expects its overall wholesale revenues to continue declining slightly next year before returning to double-digit growth rates in 2015 and 2016. The growth drivers would come from the revamping of activities in core markets such as Italy and Germany and expansion in China, Turkey and other Asian countries.

Geox aims to introduce new products for the autumn/winter seasons, to generate additional business in outerwear, to develop online sales, to strike new distribution alliances, to further push in-season management and reorders, to introduce specialized regional teams by channel and product line, and to launch a new customer care project. From €325 million this year, wholesale revenues would decline to €320 million in 2014 and then grow to €359 million in 2015 and €407 million in 2016. An overall 25 percent increase is expected for the wholesale business over the three-year period, with sales in the Asia-Pacific region seen rising by 117 percent.

During the first half of 2014, Geox will pursue the thorough review of its network of mono-brand stores that it has been carrying out over the past years. In 2012, the group opened 212 new stores and closed 140 others. The number of stores will grow again this year thanks to 200 new openings and 115 closures. For next year, Geox is aiming for 96 openings and 68 closures. There would be 25 closures performed in Italy and 21 in the rest of Europe. Thanks to the restructuring, the retail network is expected to generate higher profitability from next year.

The group has scheduled 82 openings and 10 closures for 2015 and 76 openings and three closures for 2016, allowing the number of mono-brand stores to rise to 1,500. At the end of September, Geox had 1,270 mono-brands, of which 434 were directly operated. In the first nine months of the year, it opened 158 locations and closed 100.

Geox is forecasting retail sales of €431 million this year, €484 million in 2014, €528 million in 2015 and €577 million in 2016. The company aims to boost same-store sales as well: they are seen rising at an annual average of 5 percent for the company's directly managed stores (DOS) over the next three years of its business plan, increasing 3 percent for franchisees and 4 percent for factory outlets.

The company's policy of focusing on fast-growth emerging markets will reduce its exposure to Italy and other Western European markets. Already in 2014, Italy's share of total sales should decline to 31 percent from 32 percent in 2013 and Europe will drop to 40 percent from 44 percent. North America should remain stable at 7 percent and the rest of the world should grow to 22 percent from 17 percent.

In Italy, the company's total sales are seen growing from €245 million this year to €301 million in 2016. Growth drivers will be comparable-store sales and high single-digit growth for wholesale revenues from 2015 onwards.

In the rest of Western Europe, sales should rise from €327 million in 2013 to €399 million in 2016. Growth will come from wholesale expansion in Northern Europe, the opening of about 55 new store in the region, mostly franchised, and positive same-store sales growth.

In Eastern Europe, sales are expected to go up gradually from €48 million this year to €58 million in 2016. Revenues are seen rising by a mid-teen rate over the period in Russia and by a mid-single digit in other Eastern European countries and the Balkans.

Revenues in Asia-Pacific are anticipated to reach €57 million in 2013 and €118 million in 2016. Growth will be generated by DOS expansion in China, where the group wants to have about 100 stores by 2016, and a high annual single-digit increase in same-store sales, coupled with significant development at wholesale.

In North America, the turnover is projected to grow from €53 million this year to €65 million in 2016. In the U.S., where it is losing money, Geox aims to maintain a presence in both the wholesale and retail channels, but reach at least breakeven results.  In Canada, the growth will be driven by wholesale expansion.

In the rest of the world, revenues are forecast  to rise from €26 million in 2013 to €44 million in 2016. The company aims to develop key wholesale accounts and a network of store franchises in Turkey. Sales are expected to remain flat in South America and to grow by a mid-single digit a year in the Middle East and in Africa thanks to the wholesale channel.

To lift its profitability, Geox plans to cut product costs and improve the efficiency of the supply chain. It aims to reduce the complexity of its product range, both in footwear and apparel. It will also institute tighter controls over corporate and regional general and administration costs. The group estimates that it can improve the gross margin by 4.0 percentage points in the next three years. Nearly half the improvement could be achieved in 2014.