Italian footwear group Geox swings into red in 2019

In 2019, Italian footwear group Geox generated a revenue of €805.9 million, equivalent to a 3.3% shortfall at constant exchange rates and a 2.6% one at current rates. Geox has been downsizing in the multibrand retail and franchised stores channels in order to reduce business risk.

“In addition to socio-political tensions in some key markets, France and Hong Kong in particular, and to the major changes looming in Europe owing to Brexit, the entire industry has had to deal with a profound, continued change in purchasing behaviour, which is increasingly oriented towards digital channels,” said CEO Livio Libralesso. Geox noted however that there was an improvement in Q4, with revenue growing 4.9% over the same period in 2018.

Adjusted EBIT was in the red by €3 million (it was €15.2 million in 2018). Adjusted net income was negative by €10.6 million (it was €2 million in the black in 2018), due also to the non-allocation of nearly €4 million in deferred tax assets. The net financial position was €6.6 million (pre-IFRS 16), net assets were €305 million, and operating capital was equivalent to 22.7% of revenue, following an inventory optimisation effort.

“The year began well, with positive results in our stores until early February 2020, but the recent developments linked to the spread of Covid-19 have had an impact on footfall and retail sales, especially in the countries that have been worst hit by the virus’ spread,” said Libralesso.

He added that “Geox is liaising closely with the authorities and has deemed it essential to immediately implement all the measures necessary to protect the health of its employees, partners and suppliers, and of consumers. Current evidence shows that our own e-tail channel is resilient, and so are some of our main markets, but also that we must monitor how the situation is evolving with the utmost care, in order to both deploy initiatives to counter the possible negative impacts on business, and to continue our activity and carry out the most essential investments, relying on the group’s solidity.”