The weather decided on the CCC result in the first quarter of 2018

The beginning of the year showed an impact of the weather on the sales results of the footwear industry. The market leader, CCC, closed the first quarter with a 4% drop in revenues. However, online revenue increased by 52%, and the floor space increased by 16 thousand m2 and amounts to 552 thousand m2 in total of 934 stores. The company also introduced a new standard for reporting, IFRS 16.

The CCC Group, one of the largest footwear retail companies in Europe and one of the largest footwear manufacturers in Europe, reported sales of PLN 694 million in the first quarter of 2018, including PLN 526 million from the offline channel and PLN 168 million in the online channel.

"The first quarter showed us how sensitive the weather is to the business we run. After a satisfactory beginning of the year, the return of the harsh winter in the region delayed the start of spring collection sales being introduced to stores in the second decade of February. It affected sales in like for like stores, which was lower by more than 20% compared to the same period of last year, " says Marcin Czyczerski, Vice President of the CCC Management Board.

The drop in sales was visible in all regions except Russia, which also had its significant share in the growth of sales area. On the other hand, CCC recorded a significant increase in the share of e-commerce in consolidated sales, which shows that this segment is much more resistant to weather conditions. Online sales is characterized by lower seasonality. The target group is much more fashion-oriented, and pays less attention to the weather.

"The past three months convinced us that work on cost optimization is crucial to consolidate a stable level of profitability and make it independent of weather at some point. We intensively work on all types of costs. The first effects can be visible today, however this is just the beginning of work. The full impact on the financial result can be assessed from the perspective of the entire year. In the first quarter of 2018, we introduced a new standard of financial reporting in accordance to IFRS16. It caused large changes in each element of the financial statement, due to the different recognition of lease agreements. CCC is one of the first companies to implement this standard, let me remind you that it will be compulsory from 01.01.2019. We are happy about this as these changes were associated with a large amount of work, and we are facing the finalization of many strategic projects that are entering the culminating phase. The nearest future will also be under the slogan of organizing and developing the sales network, which we announced at the beginning of the year. These two directions will positively affect the size and results of the CCC Group."

CCC is preparing to take over almost 40 agency stores in south-eastern Poland and over 50 franchise stores in Romania. During the preparation there are also contracts for a network of franchise stores in Georgia and Kazakhstan, and in 2019 CCC will open first stores in the Middle East. On the other hand, eobuwie.pl is taking its first steps on the Italian and Spanish market, and by the end of 2018 it is to enter the French market.

In the spring season, CCC also expanded the group of consumers and directed its message to a young target group aged from 18 to 24. Currently, the Youngsters campaign is being implemented, and the CCC offer itself has been expanded to such brands as: New Balance, Skechers and Puma.

The total area of the CCC sales network in Poland and abroad, after the first quarter of 2018, amounted to PLN 552 thousand of m2. The most dynamic expansion was carried out by the Company in Russia, where the floor space increased by 120% yoy. As at March 31, 2018, the sales network of the CCC Group comprises 934 stores, including 484 abroad. Total in 20 countries (17 offline and 12 online). As at March 31, 2018, the CCC Group employed over 13,000 employees.