Desigual, the popular Catalan fashion label, has experienced its most difficult year to date in 2020, primarily due to the devastating impact of the COVID-19 pandemic. The brand had already been in the midst of internal restructuring and rebranding efforts, but these plans were further derailed by the crisis. This downturn in sales for Desigual began back in 2015, coinciding with the start of the restructuring process. This posed a significant setback for the company, which was founded in 1984 and had never faced such a challenging year before.

Even as the pandemic loomed on the horizon, Desigual’s CEO, Thomas Meyer, expressed contentment with the previous year’s results in 2020. At that time, the virus was still seen as a distant threat mainly affecting Asia. Meyer believed that the difficult years the company had experienced presented an opportunity for renewal and adaptation to the changing circumstances.

However, the pandemic hit Desigual’s revenue hard, causing a massive 38.8% drop in 2020 to €360 million. This was a significant decline from the previous year’s €589 million, in which sales had only fallen by 10%. While online sales provided some relief by increasing by 48.6% and accounting for 28% of Desigual’s total revenue, it was insufficient to compensate for the overall impact of the crisis.

In an attempt to support its digital transformation, Desigual invested €18 million in 2020 to develop its online business and enhance its IT and logistics capabilities. Despite these efforts, the company experienced a reversal in its financial performance. Net income plunged into a loss of €83 million, compared to the €7.5 million profit recorded in 2019. Fortunately, Desigual managed to maintain a positive cash flow of €108 million by making swift decisions during the initial phase of the pandemic and implementing cost-cutting measures. This has provided the company with a debt-free and healthier financial position to tackle future challenges.

On March 10, 2021, Desigual published its annual financial results, revealing the breakdown of its sales by market. Spain, France, Italy, and Germany accounted for 65% of Desigual’s business. Unfortunately, these four European markets experienced prolonged store closures, with France being closed for 33% of working days, Spain for 28%, Italy for 26%, and Germany for 22%. Additionally, decreased footfall and tourism negatively impacted Desigual’s physical stores, resulting in a 45% decline in sales.

Alberto Ojinaga, the general manager of Desigual, acknowledged the complexity of 2020 and the significant impact of the pandemic on their main markets. However, he highlighted the company’s progress in restructuring their product range, repositioning the brand, and expanding their online business. Ojinaga expressed optimism for the future, particularly if vaccination efforts stabilize the situation by summer. He expects a return to normalcy in 2022.

To ensure future success, Desigual plans to adopt an omni-channel model and expand its e-shop presence to reach new markets. Ojinaga’s goal is for 60% of Desigual’s total revenue to come from e-tail and non-European sales by 2023, compared to the current 45%. The company aims to make its e-shop operational in 150 countries by the end of 2021 and prioritize digitalization to foster better consumer connections.

Despite facing immense challenges in 2020, Desigual remains resolute in its determination to recover and adapt to the evolving retail landscape. By focusing on its online business and embracing a digital-first strategy, Desigual aims to position itself for success in the post-pandemic era.

Useful links:
1. Desigual Official Website
2. Amazon Fashion