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Geox steps into 2015 steadily and leaves the red behind

By Angela Gonzalez-Rodriguez

Aug 3, 2015

The Italian footwear brand reported a sales growth of 6.7 percent during the first half of 2015. Of the 426.9 million euros noted in consolidated sales, footwear meant a 91 percent or 390.4 million euros.

"We have presented a significant growth in this half year - said Mario Moretti Polegato, shareholder, founder and chairman of Geox - thanks to the excellent performance of multi-channel (up 6.5 percent) and sales in own stores (6, 4 percent) and franchises (7.9)."

Sales in their owned stores have improved by 12.5 percent to 184.295 million euros. In regards to the franchise network, sales have fallen by 5.7 percent (70.296 million euros, compared to the 74.529 million euros reported the previous year). Meanwhile, wholesale sales increased by 6.5 percent to 172.336 million euros.

Geox returned to the growth path in 2014, after a turbulent year in 2013. Earnings before interest and taxes (EBIT) reached 7.4 million euros, while gross operating profit (EBITDA) rose to 26.6 million euros.

Italy pulls the cart of growth for Geox, which grows in Europe, USA and China

Italy, Geox domestic market, has pulled sales up in the first six months of last fiscal year by 6.3 percent in sales to 142.216 million euros.

The broader European market - excluding Italy - representing 43 percent of its total sales – sales came in at 182.814 million euros (+3.4 percent). The US market has also grown in turnover, with sales of 28.751 million euros (+18.6 percent to +3.4 percent at constant exchange rates) over the same period last year.

Finally, other regions also contributed to growth with a sales increase of 11.8 percent (+2.8 percent at constant exchange rates), reaching 73.146 million euros.

"On the external front we are seeing good growth, as in China, where our stores located in cities such as Beijing and Shanghai have registered a 30 percent increase in sales. In Asia we are considered an urban style, a channel that is not affected by the drop in luxury. Other markets that are growing are Russia, where we have 40 stores in Moscow and St. Petersburg, United States and northern Europe, "says the chief executive of the company.

In terms of areas for improvement in the coming months, clothing sales are noteworthy, after falling by more than twenty percent.

"The other crucial factor - indicates Mario Moretti Polegato to the 'Sole 24 Ore' – is the strong expansion of the gross margin, which reached 52 percent. Third is generating significant cash during the first six months of year with 74 million cash - of which we have transferred 20 million to investment - no debt and closing the period with a positive net cash of 27.6 million."

"We - says Moretti Polegato - have allocated all the necessary resources to implement the plan, focusing on research and innovation and commercial expansion of our brand abroad. As for innovation, we have launched a new product in footwear called Nebula whose characteristics reflect our latest developments in the field of temperature control and comfort. "