Desigual Q2 sales drop 9.6 percent

Desigual has ended the first half of 2017 with sales of 378 million euros, representing a 9.6 percent drop from the same period last year. 

As the fashion brand outlined in a statement on Thursday, the first quarter saw a 10.4 percent drop, while the second fell by 8.5 percent. 

The results reflect the slow sales in Desigual’s principal markets, especially in the multi-market channel and in its own stores, owing to the “rationing” of its distribution network that the company is carrying out. 

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The company’s digital channels, which represent 11 percent of its sales, registered a double-digit growth during the first six months, although the company did not release the exact number. 

The company’s earnings before taxes fell 23.6 percent compared to the first half of 2016, resulting in 55 million euros (representing 14.4 percent of its sales), mainly as a result of the drop in sales.

The net cash flow rose to 418 million euros, exceeding the liquidity levels registered by Desigual at the end of 2016 (381 million euros).

Desigual explained that during the first half of the year, it has focused its efforts on a plan to “work towards a business model centered on the client to prepare for the next stage of growth.”

The company emphasized that with regards to innovation in its products, it has already created various initiatives such as the design of pieces to be used for various occasions, and the revamp of up to 25 percent of its products in store in one season. The new concept will be presented alongside the campaign for its spring/summer 2018 collection. 

At the same time, the company has continued developing a new store concept, currently in the pilot phase, which shows a renovated design a new position in the market.