ECCO’s net sales up 3.8% in 2019

Worldwide
Published:  16 April, 2020
ECCO tannery. Credit: Michael Dwornik

The Danish tanner, shoe manufacturer and retailer posted revenue of €1,360 million (+3.8%) in 2019 from €1,309 million in 2018.

ECCO’s net sales in the footwear segment increased 4.5% in 2019, accessory sales were up 2.8%, while leather sales were down 5%. According to the company, investments in direct-to-consumer sales channels continued in 2019, with net sales from retail and e-commerce combined up 10.9% in the year. Online sale channels grew 22.2% and, despite the social unrest in Hong Kong in the second half of the year, bricks and mortar shop sales increased 8.2% globally. According to ECCO, strong growth in the Asia Pacific region offset lower net sales in Europe and North America. Presently, the Asia Pacific region represents 39% of ECCO’s sales, of which 28% are Greater China, while Europe’s share stands at 39% and North America 22%. ECCO said it is reviewing its business in Europe and is focussing on selling more premium products in the region.

The COVID-19 outbreak has negatively impacted sales from the end of January in Greater China and has impacted sales in both Europe and North America since February, according to the Group. ECCO expects the impact of the pandemic to severely affect the business, despite the company having a strong financial position. The financial outlook for 2020 is expected to be further impacted by the acquisition, in late 2019, of ECCO’s distributor in Russia, where sales declined 5.9% in 2019. “The consolidation of ECCO Ras into the ECCO Group will cause significant one-time accounting effects (non-cash), causing negative effects of €20 - €25 million on reported profit before tax in 2020”, said ECCO.

In June 2019, ECCO Leather opened a showroom in Tokyo, representing the group’s fourth showroom of its kind and presenting a selected range of innovations and classic leathers. In July of the same year, the Group started the construction of a new factory in Vietnam, its sixth factory globally. Operations are expected to commence in autumn this year. In October, ECCO also inaugurated a high-tech leather cutting plant in Xiamen, China. Read more here.