Desigual sales and profits fall in 2017

Spanish brand Desigual had a tough 2017, reporting double-digit declines in both revenues and sales as a result of falling sales in Europe and its store closure programme.

The brand has fallen out of fashion in recent years, as customers shift away from its intense patchwork designs towards more trend-led propositions.

Last year, the company saw its sales drop by 11.6% to 761 million euros ($935m), while net profits plummeted by 33.2% to 47 million euros ($57m).

French investment group Eurazeo, its majority shareholder, said the performance was down to a combination of less orders in the wholesale channel, weak sales in its bricks-and-mortar stores and the impact of the store closures.

The clothing brand was one of only two companies in Eurazeo’s portfolio to post revenue declines, alongside Sommet Education. Desigual was affected throughout the year by falling revenues in Europe, said Eurazeo.

Europe is an extremely important market for Desigual, accounting for 90% of its sales. Meanwhile, Latin America, which represents 3% of total revenues, saw sales rise by 18% compared with the previous year.

The e-commerce channel now accounts for 12% of the brand’s sales, and reported growth of 14% year-on-year.

Despite the weak performance, Desigual will move ahead with its expansion plan, expecting to open 50 new stores this year and refurbish an additional 50 over the next months.

The company is hoping the arrival of its new creative director, image-maker Jean-Paul Goude, will give the brand a breath of fresh air. Goude’s first capsule collection for Desigual will be included in the Spring Summer 2018 collection.

Desigual sales and profits fall in 2017

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