PARIS — Decelerating sales in France and Spain hit fashion chain Desigual, which saw 2015 revenues slide 3.1 percent to 933.2 million euros.
The Spanish chain also blamed a lower number of store openings in its fiscal second half for the slowdown, which dented the bottom line. Earnings before interest, taxes, depreciation and amortization fell 24 percent to 199.6 million euros, with Desigual flagging higher costs for directly operated stores.
The company said it would continue to rationalize its store network to improve profitability in the near-term. Last year, it closed 27 locations, opened 48 and converted seven franchises into company-owned units.
Desigual’s results were included in the full-year financial report of French private equity firm Eurazeo SA, which 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.
For Desigual, “the goal is to drive the company towards a more consumer-centric organization while continuing to innovate,” the report said, citing a new product strategy effective with spring 2017 collections.
Sales of women’s apparel fell 5.9 percent last year, while accessories gained 3.1 percent and kids’ wear advanced 11.8 percent.
The store count as of Dec. 31 stood at 552 company-owned units in more than 100 countries. The Desigual brand is also distributed to more than 7,000 multibrand outlets and 23 online stores.
Last year, Eurazeo took a minority stake in Vestiaire Collective, a European seller of pre-owned fashion and accessories, and it is currently in exclusive negotiations to acquire a stake in Paris-based fashion house Isabel Marant, according to market sources.