Desigual returns to profit with a turnover of €371 million
The Barcelona-based brand is recovering from the severe blow of the pandemic. After posting losses of 89 million euros in 2020, falling into the red for the first time in its history, the company founded by Thomas Meyer bounces back to positive figures. In the previous fiscal year, Desigual achieved a net profit of 3 million euros and an EBITDA of 30 million euros, which represents 8% of its total sales.
Desigual’s financial results, released on Wednesday, April 6, show the company's cautious optimism. In 2021, the ensign’s turnover rose by 3.4% to 371 million euros, compared to 360 million euros in 2020. However, this last fiscal year fell far short from sales figures reported in 2019, contracting its turnover by 37% compared to before the outbreak of the pandemic, when the Spanish company earned 589 million euros. The company’s sales record dates back to 2014, coinciding with Eurazeo fund’s entry into its capital, when total turnover stood at 964 million euros.
The digital channel grew by 16% this past year after seeing a 48% jump in 2020. In 2021, online turnover stood at 116 million euros, a figure that already represents 31.2% of the overall turnover of the company with headquarters located right on Barceloneta beach.
As detailed in the financial report, global sales in the first quarter of the current fiscal year (from January to March 2022) maintain a double-digit growth, driven mainly by “the good performance of the digital business.” Total sales are 15% higher compared to the same period in 2021, while e-tail grew by 85% compared to the first three months of 2019.
“2021 has been marked by the acceleration of key projects and the excellent work provided by all Desigual teams. Digital growth and strong progress in optimizing our network of stores has allowed us to return to profit within the timeframe we had set for ourselves, while maintaining a healthy financial structure and without incurring debt,” stressed Desigual CEO Alberto Ojinaga, pointing out that “investments carried out in 2021, amounting to 33 million euros, have laid the foundations for a new stage of growth, which is already bearing fruit at the beginning of 2022.”
The executive reiterated his forecast for double-digit growth in 2022, despite “complex” economic issues seen at the beginning of the year. “We hope to continue working on consolidating the foundations for sustained growth in the future,” he added.
Finalizing store remodeling plan
Desigual closed FY 2021, which was considered a “turning point” for the company, with a net cash flow of 103 million euros. According to the fashion firm, this figure maintains a “solid financial structure that allows it to implement key strategic projects.” One initiative that received 86% of favorable votes aimed to establish a four-day work week (three face-to-face days and one teleworking day) for the nearly 500 employees at its headquarters. It was implemented last September following a majority vote collected at Desigual’s headquarters in Barcelona. An internal survey evaluating the project six months after its implementation recorded 80% of employees stating that “the reconciliation of their personal and professional life has improved” and how they “can’t imagine going back to work on Fridays.”
The company founded in 1984 launched its own start-up accelerator last July. With an initial funding of one million euros, the project focuses on innovation and collaboration and already counts on the participation of seven international brands.
Desigual has also revamped its network of stores. Thanks to an investment of 33 million, 83% more than in 2020, its boutiques have received a complete makeover. This sum has also been earmarked to improve logistics and IT processes that boost digital growth. In 2021, 63 Desigual sales spaces were renovated, primarily in the European region. These included the refurbishment of its Spanish flagship stores in Plaza Catalunya, Barcelona, and on Preciados Street, Madrid. In Italy, its Bologna and Milan establishments were revamped, as well as the Osaka boutique in Japan.
In the previous fiscal year, the company significantly accelerated the implementation of its commercial network restructuring project, which had started in 2019 and is now "practically" complete. Currently, Desigual employs 2,700 people and operates in 109 markets through 408 monobrand stores.
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