In the first quarter 2018, the hig Russian shoe retailer saw its net profit shrink to 83 million rubles (€ 1.15 m, $1.35 m), 43.3 per cent down as compared to the first quarter 2017, despite an increase in its revenues of 6.3 percent to 2,260 million rubles (€31.3m-$36.7m).
A reduction in the gross margin to 52.6 percent was attributed by Obuv Rossii to a shift in weather conditions in Russia, causing a drop in consumer traffic in the stores. The drop in net profit was also linked to some extent with the strong expansion of the company's retail network. The retailer added 34 doors to its chain in Russia in the quarter 2018, fully in accordance with its plans.
Seeparately, Obuv Rossii noted a strong increase of 26 percent in online sales during the first quarter 2018, pushing their share of the total turnover to 13.4 percent. To drive the growth in online segment, the company is streamlining internal processes, the operations of its call-center and deliveries.
In addition, the company came out last month with modernized versions of its two main websites, Rossita.com and Westfalika.ru, and launched its second mobile application for Rossita. Obuv Rossii's first mobile application, Westfalika, came on stream in 2014.