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May 2, 2017
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Adolfo Domínguez ends with a loss of 22.7 million euros, but says positive change is underway

By
EFE
Translated by
Emily Jensen
Published
May 2, 2017

Spanish brand Adolfo Dominguez ended its last financial period with a loss of 22.7 million euros, compared to the 7.9 million it gained a year ago, in which it benefitted from the extraordinary results of the sale of its property holdings (42.3 million euros).


Adolfo Domínguez


 
Without those revenues, the company would have lost almost 30.7 million euros in 2015, according to figures relased by the National Market Value Commission (CNMV), which also cited a 9.6 million euros loss due to changes in financial legislation in 2016. 
 
Excluding both of those factors, the losses of the financial period that ended in February would have been 13.3 million, 17.5 million less than the previous year.

With regards to the growth of the business, Adolfo Dominguez states that sales grew 4.3 percent, up to 110 million euros, with an uptick in in-store sales by 9.2 percent (without taking into account store closings).
 
The difficult period resulted in a negative balance of 8.7 million euros, which, thanks to the upticks in sales and reductions in operating costs, was actually around half of 2015’s operative losses of 17.8 million.
 
The company, which was founded by the Spanish designer of the same name, closed the period with 511 stores, 33 fewer than in the previous year. It reduced its European stores by 22 to a total of 299, while in Mexico, the brand’s most important market outside of Europe, it maintained its 137 stores.
 
Despite an unfavorable exchange rate, sales in Mexico grew by 11.5 percent, while in Europe and Japan, sales dipped slightly, with the latter falling from 8.8 million to 7.8 million euros.
 
The figures were presented at a press conference in San Cibrao das Viñas, in the Galician region of Spain. The brand’s designer, who hails from Galicia, was not present at the press conference. The company’s vice president, Luis Caramés, displayed optimism and declared that while the figures are still not satisfactory, they show a departure from the negative trends, which he attributed to the change in direction.
 
In a prior meeting with the press, Adolfo Dominguez himself defended the change in direction following the bad results of the previous years, and underlined the improvements the company has made from losing “20 euros for every 100 sold” to gaining “two euros for every 100 sold.”
 
“I can say we’ve stopped the leak, we are not losing money but gaining two euros for every 100 we manufacture, when seven months ago we were losing 20,” Dominguez said as he showed the brand’s works on display in San Cibrao.
 
To undersign this change, Caramés emphasized the improvement in sales, which went up from 54.3 million in 2015 to 59.1 million in 2016, as well as the reduction in debt to .56 percent, which he noted as significant in “the current times." He also pointed out changes in purchasing which have allowed them to “buy better and with improved quality.”
 
The goal is to be able to “report profits sooner rather than later,” stated Caramés, who sees an “inflection point” thanks to the results of the second semester of 2016.
 
The company’s managing director, Antonio Puente, underlined that the data, while still not entirely positive, “invites optimism,” and stated that the losses would not have been so great if it weren’t for changes in legislation, which entailed the payment of nearly 10 million euros in taxes.
 
Retail director Dora Casal confirmed a series of “adjustments” within the organization and its stores, which, she assured, are very much “alive.”
 
Caramés, who admitted that the previous direction may have been going down the wrong path, has done away with signing new deals, saying that now “it’s best not to touch anything.”
 
Following questions from journalists, he also confirmed that the brand maintains an excellent relationship with Puig, the Spanish group which owns Adolfo Dominguez, despite their exit from its leadership advice, and maintained that there are no hard feelings between the two entities. 
 

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