Desigual: a harmful flip to have a look at 500 million

Desigual goes to obtain the results of the transformation course of that began in 2019, simply earlier than the pandemic. The corporate, which grew to become a Spanish vogue phenomenon within the first decade of the 2000s with excessive development, on one of many riskiest endeavors a vogue model can tackle: altering prospects and setting. They’ve already reached the brand new shopper and Desigual has once more grow to be a phenomenon (now viral), however the impact on gross sales will nonetheless take time to succeed in. Thomas Meyer, the founding father of the corporate, and Alberto Ojinaga, normal director, clarify to Modaes how Desigual had the “most harmful” leap, which is now 500 million euros in 5 years .

Forty years have handed since Desigual began. Based within the eighties, it went by means of varied phases of ups and downs till it took off within the late nineties. With vivid colours, prints and embroidery for flag, The model started a part of worldwide development, multi-format distribution, sector growth and plenty of advertising. If you do not have the shopper mainstream and also you wish to obtain quantity, it’s essential to attain it in every single place, in each attainable means and thru each channel.

If there was a turnover of 300 million in 2009, in 2011 it reached 500 million, in 2012, 700 million, and In 2013, it exceeded 800 million euros. Everybody cherished Desigual, which grew to become the fourth largest Spanish firm within the sector, behind Inditex, Mango and Tendam. Purchasers and, additionally, threat capital. Firstly of 2014, in whole disturbance of the phenomenon, the French fund Eurazeo obtained 10% of the capital, and paid 285 million euros for that.

Desigual is likely one of the riskiest endeavors a vogue model can undertake: altering prospects and setting

In 2014, every part began to alter. The outcomes upset the market and the brand new shareholders, with the smallest development within the decade and falling beneath a billion in turnover, a aim that was broadly introduced. Desigual then began a reorganization plan to lose dimension underneath the advice of the Boston Consulting Group, renewed its administration crew and even stated goodbye to Eurazeo, which bought its enterprise to Thomas Meyer.

Nothing Desigual appeared to work. Till now, in 2023 and 2024, when the model has gone viral once more, conquering influencers from everywhere in the world who marvel, shock them, how it’s attainable that they now just like the model they thought of a college instructor earlier than. Simply earlier than Covid-19, Desigual started a harmful flip in the direction of a brand new place, shedding its outdated shopper to get a brand new one.. Desigual’s shopper had grown older and, to reply to her demand, the corporate needed to provide her a product and advertising that catered to the brand new generations.

The transformation of Desigual started between 2019 and 2020, however the first assortment during which the change was seen got here in 2021. “Covid-19 pushed us to be extra courageous in change,” says Thomas Meyer. Desigual selected to depart its conventional shopper behind to concentrate on a buyer who was persevering with to maneuver ahead (“fashionista”, as they are saying), between 25 and 40 years outdated. “70% of latest purchasers had been over 40 years outdated, we allow them to go“Ojinaga remembers. “It was a dangerous and courageous guess: it is fortunate to have an proprietor who seems long-term,” stated the supervisor.

The vacation spot

Final week, Desigual celebrated its fortieth anniversary with a vogue present in Barcelona. There have been greater than 300 folks, together with the mannequin and actress Hari Nef, the mannequin Amelia Grey, Carlota Marañón, Gigi Vives, Ariadna Tapia and Sofia Coelho (together with Manel Adell, CEO Desigual on a regular basis), current. A big yellow carpet and a set of mirrors unfold out in entrance of the ocean in Barcelona. The photographs have stuffed social networks.

“The present state of affairs is just not a coincidence; It has required laborious choices, consistency over time and endurance – explains Alberto Ojinaga-; Now we have made troublesome choices with adverse short-term penalties and fewer apparent long-term optimistic outcomes.“.

“It is vitally simple to lose prospects and really troublesome to get them,” stated Thomas Meyer; That is the most important problem a model can face, others have fallen by the wayside. ” Worldwide firms reminiscent of Loewe, within the luxurious sector, have made the same repositioning, however over a for much longer time period. Abercrombie & Fitch is one other instance of a turnaround in a better interval that has flipped the numbers.

“With a medium or long-term imaginative and prescient, if you cannot entice new prospects you are screwed,” Meyer factors out. “For a few years we did not take note of it and we did not understand that we did not join with the younger shopper,” he says; the notion of the model is made on the road and should you’re not there… each model wants relevance.”

Thomas Meyer: “With a mid-term or long-term imaginative and prescient, if you cannot entice new prospects you are annoyed”

“We’re the standard Desigual, however we take a look at a special buyer,” says Thomas Meyer; “The street has been very troublesome.” With the brand new shopper outlined, Desigual’s focus lately has been on the product, with “newer collections, extra vogue and with a improve in high quality”, in Meyer’s phrases. “We proceed to really feel printing, a patch y whitehowever in one other means“, he says.

In follow, Desigual’s new product interprets into extra relaxed collections that join with as we speak’s buyer, however with out shedding the model’s distinction. with a renewed community of suppliers with a better emphasis on proximity (50% within the Euro-Mediterranean basin and 50% in Asia) and materials that present increased high quality to the garments. “We needed to open a brand new dialog and we have finished it,” Meyer stated.

In parallel with the end result, the sources modified, each the visible reminiscent of the placement and variety of factors of sale. The corporate has been restructuring the community of its personal shops for years, but additionally its multi-brand shops.clearing all these establishments that don’t match his new place.

The burden of the a number of manufacturers in Desigual’s distribution causes, on the one hand, community reorganization will weigh on general gross sales and, alternatively, that the velocity of reaching the alternate market is slower. “Within the digital channel, the change was seen earlier and on-line gross sales are growing,” defined Ojinaga.

The identical factor occurs with geography: in those that are new, who don’t have the outdated concept of ​​Desigual, gross sales are rising quicker. Meyer offers China for example, the place from 2022 the corporate works with an area companion, a subsidiary of Septwolves. Desigual’s new product may be very nicely obtained within the nation, to the extent that the model will open subsequent October flag retailer on considered one of Shanghai’s important streets with the assistance of her native companion.

Among the many firm’s mature markets, It’s in Spain and Germany the place gross sales are performing finest, whereas in Italy and France “the change is taking longer to return. “ On the different excessive are the UK and the US, “two markets that aren’t rising,” in accordance with Ojinaga, and the corporate leaves for a second degree.

Desigual began attacking the product, then the shops and, lastly, communication

After the product and the shop community, Desigual has attacked communication. His eloquence and vivid character have performed in favor of Desigual, which has grow to be a semi-viral phenomenon due to the posts from their new purchasers, they had been stunned that they now like Desigual.

As well as, the corporate has recovered actions from its golden age, such because the one which invited prospects to go to shops in underwear or bare and take free garments to to cowl himself, and on the identical time has launched social networks the place the youthful folks like Tik Tokand never forgetting Instagram.

Financial outcomes

The outcomes haven’t but been uploaded to the euphoria of the picture, however Thomas Meyer is totally assured that it’s a matter of time. “When you get match, you may develop once more,” he says. How a lot?We’re not mass marketwe do not transfer slightly up or slightly down relying on how the market goes; If we do nicely, we are going to develop rather a lot, greater than 30% yearly,” he thinks.

“Being a special model from the others, we’re outdoors the final rhythm of the trade,” he says. Meyer, who estimates that in 5 years Desigual can have grown to 500 million euros. If their aim is achieved, the corporate can have registered a 30% improve from 2023.

Meyer and Ojinaga choose to not give particular figures (till now, Desigual printed its financial evolution yearly), however They point out that gross sales have remained steady in 2023 in comparison with 2022, when the corporate’s income stood at 379 million euros.. In 2023, 35% of gross sales have been in accordance with the net channel.

Alberto Ojinaga: “We’d reasonably guess on change and be certain that in 2024 the change is transferred to the trade. “

Though general gross sales haven’t elevated, Ojinaga factors out that in 2023 Desigual recorded the primary optimistic natural development since 2016. “Double-digit natural development each month and in nearly all international locations,” he stated, explaining that the adverse evolution of the multi-brand channel and retailer closures proceed to weigh on general gross sales.

On the identical time, The corporate has offered income for his or her upkeep momentum Of the model. If in 2022 the corporate recorded a internet revenue of simply over three million euros (after returning to income in 2021 after Covid-19), in 2023 the corporate has returned to pink numbers “in consequence invested.”

“We’d reasonably guess on change and be certain that in 2024 the change is transferred to the trade,” says Ojinaga. In 2022, Desigual invested 28 million euros in rehabilitation and In 2023 the corporate has given 8% of its gross sales (round 30 million euros) to advertising.“a funds that may develop in 2024,” in accordance with Ojinaga.