International expansion
Desigual opened 89 new stores worldwide last year, which resulted in a total of 405 own stores for the Spanish group, but this year another 100 will be added, according to CEO Manel Jadraque’s statement to French business paper Les Echos.
The fast expansion helped the company reach a record turnover in 2013 of 828 million euro. It not only has its own stores to thank for that, as Desigual’s collections are also available in 11,000 multi-brand boutiques and 2,500 shop-in-shops in department stores.
Jadraque is focused on his huge ambitions: “We want to increase our turnover 25 % per year through new product ranges and an increased international expansion.” Desigual launched its first perfume at the beginning of the year and it has also launched a sports collection, both of which are being tested in several markets.
“In the next two years, we will focus on seven different growth areas outside of Europe: Tokyo, Hong Kong, Singapore, Rio, São Paolo, Florida and New York. We also seek further growth in other countries, but not through our own boutiques as our recent closure of two Chinese stores demonstrates.”
Another growth path is through its web shops: “E-commerce became a path three years ago and the results have been satisfying, even though we consider e-commerce to be an additional channel which may cut somewhat into other channels. As long as the result is positive, we are satisfied. In 2013, our online sales reached 85 million euro, but within 5 years, our online sales should represent 20 to 30 % of our total turnover.”
France catches up to Spain
Eurazeo’s large financial investment has made these growth plans possible: the French investment company paid 285 million euro in return for 10 % of Desigual’s shares. “We made a logical choice when we picked Eurazeo. Not only have its other investment projects proven to be successful, France will also become our largest market by the end of 2014 or the beginning of 2015.” France represents 19 % of the group’s turnover, Spain currently brings in 23 %.
Jadraque hopes to have 100 French Desigual stores in three years’ time. “We currently have 57 French stores and by the end of the year, we should have 72. It shows Desigual’s intent, because France only had 9 Desigual stores in 2010.
