Desigual, a Spanish apparel brand which is known for its patch work designs and intense prints, has announced its full year financial report for the year 2016. It has noticed a net profit of Euros 71 million (US $ 76 million), up 9 per cent when compared to the previous fiscal year. However, revenue for the brand plunged 7.8 per cent to Euros 861 million (US $ 925 million).
Alberto Ojinaga, Chief Corporate Officer, Desigual said, “The company achieved the profit growth despite a reduction in sales and EBITDA due to its 2016-17 strategy and the fact that provisions set aside in 2015 to cover for the company’s transformation process were not needed last year.”
The company’s net cash position increased by Euros 83 million to Euros 381 million (US $ 409 million) – the biggest monetary reserve they has ever had, according to Ojinaga. Strong liquidity improvement, with an “extremely healthy” cash position and growing profits will help the company go through its transformation process with a certain degree of saturation, Alberto underlined.
The clothing brand saw the sales drop in its core market Europe, where currently the retailer has its 90 per cent of customer base, on the other hand company faces the considerable revenue surge in Latin America.
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The apparel brand is undergoing a revamp that will see its brand identity and design update based on a greater understanding of its consumers. In the previous year, Desigual introduced seven new outlets and closed 37 out of 500 stores of company, globally.