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The Italian footwear brand has reported sales of €182.9 million for the first quarter of 2020, down 29.9% at current rates and 30.2% at constant exchange rates. The company said it is working closely with its suppliers to reduce purchases for the upcoming autumn-winter collection as a result of the coronavirus pandemic.
Geox has attributed the sharp decline in sales to the Covid-19 pandemic, which has led to the temporary closure of company stores worldwide. E-commerce sales, however, were up 21% in the quarter, with further growth recorded in April (+102% year-on-year). Since the beginning of the year, online sales recorded 41% growth, according to the company. “At a time when 80% of our physical stores are still temporarily closed, the only real business indicators we're getting are from the e-commerce channel”, said Mario Moretti Polegato, Chairman and Founder, Geox. “We're recording strong growth in this channel, with sales doubling over recent weeks thanks also to the acquisition of new customers”, he said, adding that these results confirm the company’s investments and strategic choices over the last few years. In early March, 63 Geox Directly Operated Stores were re-opened in China, Hong Kong and Macau and, in early May, Germany, Austria, Holland, Hungary and Poland are also experimenting with the reopening of 45 stores.
Measures to improve the company’s cashflow include postponing non-essential investments, such as store revamps or new openings. Overall, the investments initially planned for 2020, amounting to €40 million, are to be reduced by 40%. Geox said it also is working closely with its suppliers to reduce purchases for the upcoming autumn-winter collection by approximately €40 million (-21%). The company purchases approximately 4% of its finished products from China (mainly apparel) and it uses Chinese suppliers for some of the raw materials used for manufacturing in other areas of the Far East. Production activities are said to have gradually recovered and all of Geox’s suppliers in China are now operational.
Production activities in India are expected to resume on May 18, according to the provisions of local regulations. In Serbia, the precautionary measure was taken to halt production in its owned plant in order to safeguard employees’ health and avoid production inefficiencies linked to potential absenteeism due to the health risk and to the fact that certain borders have been temporarily closed for the transport of goods. According to Geox, some production lines have become operational again, and the plant is expected to be fully operational by the end of May.