French sportswear brand, Le Coq Sportif, has seen a rise in revenue for the year 2019, despite facing a decline in profitability. Known for supplying sports outfits for prestigious events like the Tour de France and the Olympic Games, the company witnessed a 6.9% increase in sales during fiscal 2019. This growth can be attributed mainly to a significant 23% surge in its apparel sales.
The credit for Le Coq Sportif’s successful expansion strategy goes to its parent company, Airesis, which has made substantial investments. These investments have proven fruitful by generating increased sales for the brand. However, they have also resulted in a drop in profitability. The footwear segment of the business experienced a 10% decrease in sales due to the poor reception of its Spring/Summer collection. As a result, Le Coq Sportif estimates a loss of 4% to 5% in gross profit margin, with an impact of around 6 to 8 million euros on its EBITDA.
Despite these setbacks, Le Coq Sportif remains optimistic about its future prospects. The company plans to transition its footwear category to a regular resupply model, mirroring the success of its apparel category. Furthermore, Le Coq Sportif has boosted its footwear production in Portugal in order to enhance flexibility and product quality.
For the fiscal year 2020, Le Coq Sportif has set a goal to achieve revenues surpassing 140 million euros, with an expected EBITDA of approximately 4 million euros. However, the company’s financial forecast does not account for the potential impact of the ongoing coronavirus pandemic.
Marc-Henri Beausire, the CEO of Le Coq Sportif, admitted that the company’s 2019 results fell short of expectations. Nonetheless, he expressed confidence in the brand’s overall strategy and firmly believes that the adjustments made in 2019 have positioned Le Coq Sportif for future success.