Sale shoes Ecco in Russia for two years has been halved

World’s largest Shoe manufacturer Danish Ecco in the report for 2015 reported a 50% decline of sales in Russia in physical terms in the last two years (2014-2015). The absolute numbers of sales in Russia Ecco does not disclose. According to the company, sales of shoes and accessories in the EMEA region (Europe, Middle East and Africa), which includes Russia, have declined over the past year by 6.6% to Euro 533 million.

Total revenue global company with more than 1,300 stores in 2015 increased by 7.4% to 1.3 billion euros, profit before tax increased by 4% to 183 million euros.

“Problems in the Russian market continued to put pressure on the company’s profits, but was reduced by increasing the efficiency of production, logistics and concentration on operating costs”, — stated in statements of Ecco. In the fall of sales head Ecco blames the rising cost of production due to the weakening of the ruble and the falling purchasing power of Russians. Partially compensate for the loss in Russia had succeeded at the cost of increasing consumer spending in Europe and strong growth in Asian countries, stated in the document. In the report several times mentions that despite the volatility of the Russian market, the brand position is very strong: the company will support its partners and will continue to work in the country.

The popularity of Esso in Russia:

Brand Ecco is one of the most popular among Russians. According to the study “Reindex” consulting company Comcon, Ipsos carried out during the second half of 2015, the brand took the third place among the most recognizable footwear brands in Russia after Centro and Salamander. The study showed that the shoes Centro choose 57.4 per cent of respondents, Salamander — 34,8%, Ecco is 29.5%. The sample for the study on an annual basis is 25.7 thousand respondents living in cities with population over 100 thousand people.

In Russia, Belarus and Kazakhstan Ecco is the official distributor of company “ECCO-ROS”, which owns a network of 165 corporate stores under the brand Ecco. According to SPARK, now the company on a parity basis own businessmen Andrey Semagin and Ivan Stapel. The company’s revenue in 2014 (more recent statistics are not available) amounted to 11.2 billion rubles, net loss of 1 billion rubles Distributor reported a net loss for the first time since 2010. According to the representative of the Russian division of Ecco Mary’s Debt, the whole of last year, the company changed business processes: reduced the scope of procurement, the network began an update of retail outlets.

In a difficult situation now many players of the footwear market. According to the National Union of footwear, Shoe market of Russia and in terms of raw materials and finished products rely on imports more than 80%. Chief expert, Fashion Consulting Group on the range and forecast trends Galina Kravchenko notes that international brands operating in a price segment “average plus” become “hostage photo”. “The cost increase by 30% (which is less than the change in the exchange rate) move their products in a different price category” — explains the expert. For example, a brand with an average price of a pair of 6.5 thousand rubles, which previously was in the upper middle segment, with the price increased 30% were worth nearly 8.5 thousand rubles, in 2014-m worth of shoes the premium segment, gives the example of Kravchenko.

Consulting company Euromonitor International expected that in 2015 the volume of the footwear market in Russia (excluding sport shoes) will be reduced by 6% to 657,8 bn, compared with 2014. According to Kravchenko, is more stable in this situation Russian company, as they have the ability to respond more quickly to consumer opportunities.