PARIS — Tough market conditions and declining tourism in France bit into Desigual’s third-quarter fortunes, helping to send overall sales down 5.8 percent.
Revenues also dropped in Germany and Italy, while “Spain was in line with the prior year, benefiting from a better macro environment and positive tourist flows,” according to French private equity firm Eurazeo SA, which provided select details of the fashion chain’s performance in tandem with its third-quarter results.
It did not provide a revenue figure for the third quarter, but noted that the drop was inferior to the 7.5 percent decline in the first half.
Sales in the nine months decreased 6.8 percent to 675.2 million euros, or $753.7million at average exchange rates.
Desigual also blamed the decline on lower traffic and a rationalization of company-owned stores, initiated in 2015 and continued through the nine months year to date.
It noted online sales posted single-digit growth in the third quarter.
The company credited its rationalization plan for allowing it to “limit the year-on-year margin erosion compared to previous quarters.”
In 2015, Desigual closed 27 locations, opened 48 and converted seven franchises into company-owned units.
As of Sept. 30, 2016, its net cash was 344.7 million euros, or $375.9 at current exchange, an increase of 86.5 million euros, or $94.3 million, versus last year.
Eurazeo SA invested 285 million euros in Desigual in 2014 in exchange for 10 percent of its share capital.
The transaction gave the Barcelona-based company an enterprise value of 2.7 billion euros and followed Eurazeo’s first big foray into the fashion sector with its 2011 purchase of a 45 percent stake in Italian firm Moncler, which went public in 2013.
Last year, Eurazeo took a minority stake in Vestiaire Collective, a European seller of pre-owned fashion and accessories. It also holds stakes in Europcar, Accor Hotels and nursery operator Les Petits Chaperons Rouge.