Desigual turned profit last year, thanks to support from reforming stores and improving internal logistics. Catalan fashion firm he headed Thomas Meyer cutting short last year’s losses, achieving a net profit of three million euros and an EBITDA of 30 million euros. The 2021 balance silences repeated criticism of a firm that has made disruption part of its DNA and is trying to adapt its designs to new clients without betraying its style.
Desigual, which has more than 2,700 employees, operates in 109 countries with 10 sales channels and 408 stores. It closed 2021 with a turnover of 371 million Euros, 3.4% more than 2020. The evolution of sales in the first quarter of 2022, with 15% growth over the previous year, nevertheless seems to mark a turning point. context of uncertainty. Digital business grew 85% compared to Q1 2019; this is an example of the paradigm shift that is making online selling an essential part of business for years to come. The target is for 60% of sales to occur on the digital channel or outside Europe by 2023 (currently 55%).
In 2021, the store network was reduced by 20 establishments after 18 openings and 38 closings. The digital channel currently represents 31.2% of the business volume and reaches 116 million euros. Although each has set its own pace in this transition, online commerce has been the main engine of change for all firms in the fashion industry. Online sales also forced Desigual to adapt its network of stores, which, according to the company, started in 2019 and was “practically finished.” The reform of the stores required investments to increase by 83% last year to 33 million euros, compared to 18 million euros in 2020. These investments also included improving the logistics chain and implementing new digital business control tools. A total of 63 stores were renovated last year, most concentrated in Europe. Desigual’s goal is to have 90% of its store network fully renewed by the end of this year. remodeling of ‘flagship’ stores in Spain (Plaza de Catalunya in Barcelona and Calle Preciados in Madrid); from Italy (Milan and Bologna) and Japan (Osaka).
Desigual is clearly committed to advancing logistics and technological innovation as the keys to improving product usability. With ‘Apolo’, a strategic project focused on optimizing inventory and forecasting demand, the company has succeeded in making its logistics operations profitable and reducing an average of 1,300 garments per store per year. Desigual is one of those firms that tends to involve its workforce in strategic baptisms. Currently, Open Desigual is spoken in the firm’s offices as a success factor in the current transformation. Collaboration with other firms, hand in hand with startup accelerator Awesome Lab, should lead to a competitive advantage.
In times of supply difficulties, inventory control was key to achieving lost profitability in 2020. It fell 27% and still, product availability increased by 4%. CEO of Desigual, Alberto Ojinagapromotes the idea that demand in each market must be met quickly through “proactive management” of the product range, with the ability to anticipate and respond to changing conditions. Desigual works with a unified stock so customers can purchase any product regardless of the country or channel they use. “The availability of apparel affects the shopping experience and manages inventory in real-time and precisely has a direct impact on consumer satisfaction,” says Desigual.
The Catalan multinational came to the fore last year by offering a 4-day working day (3 days in the office and 1 remote work) to approximately 500 employees of its head offices, in an effort to offer greater flexibility and family reconciliation. With this proposal, it became a pioneering and rule-breaking firm to an extent that was not welcomed by the unions. The proposal was passed in a vote with more than 86% of the votes in favour. Six months after implementation, 90% of affected staff think the new formula has increased people’s happiness, and around 80% believe it has improved harmony in their personal and professional lives and cannot imagine returning to work on Friday.