Strong growth in existing points of sale, successful acquisitions and significant investments in the 110th anniversary of the brand.
April 25.- Good news from Essen, DEICHMANN, Europe's largest shoe retailer announces significant growth in 2022. Group gross revenue reached a record of more than 8 billion euros in 2022. The company based in Essen focused on seizing opportunities, despite the crisis, and made forward-thinking investments to establish strong strategic foundations for the future. In 2023, DEICHMANN continues to focus on self-financed expansion, modernization of the store network, constant expansion of its brand portfolio and optimization of its successful omnichannel strategy.
DEICHMANN SE, headquartered in Essen, Germany, operated in 31 countries in 2022. In the last fiscal year, the group generated worldwide gross revenues of €8.1 billion (net: €6.9 billion). In 2019, the last fiscal year not affected by COVID-19, global gross revenue was €6.4 billion.
Thus, revenue growth of around 23% has been achieved. This positive evolution across the entire portfolio was driven by the growth of its own stores and the online sales channel, as well as by successful acquisitions, for example, in the United States.
"So far we have navigated the crisis effectively by taking advantage of the opportunities available and looking to the future with optimism. The strong growth across the group of our existing outlets in the last year is particularly encouraging. Around 9% growth on comparable floor space, in DEICHMANN Group stores it is a very positive result and, if online stores are included in that figure, we achieved growth of around 15%." In its 110th anniversary year, DEICHMANN remains a healthy and future-proof company", says Heinrich Deichmann, Chairman of the Board of Management of DEICHMANN SE.
Strong sales growth across the group
In 2022, 178 million pairs of shoes were sold worldwide in stores and through the group's online stores. The DEICHMANN Group generated 67% of its turnover abroad. As of December 31, 2022, the company operated a total of 4,565 stores and 41 online stores, and had more than 48,000 employees.
"I am very grateful that 2022 has been a successful year for us, particularly in light of the many external challenges we are facing. Success in this form was not foreseeable. We have a very clear positioning. And our DEICHMANN concept has shown that our core value proposition of offering the best value for money on the market is also attractive to customers, especially in a crisis situation.
The latest annual ranking of the public opinion and research company YouGov on the topic of value for money places us first in the category of fashion retailers. We have also been able to attract new consumer groups to both our stores and online stores with our fashion range plus other well-known brands, and the higher-priced brand-name models have sold well. We have also constantly invested in improving the attractiveness of digital stores and services, and our courage has been rewarded by the majority of consumers,” added Heinrich Deichmann.
2022: a year with many external challenges
2022 was characterized by external crises, just like the two previous years. The change in the rules for customer access to stores in the first months of the long COVID-19 pandemic had a strong impact on the business, especially in Germany. "It benefited us to have such extensive international operations because an international structure makes us much stronger in this type of situation," explained Heinrich Deichmann.
The mandatory use of wearing a mask was not abolished until the end of April, which significantly boosted sales. Heinrich Deichmann: "Many people predicted that consumers would shop less frequently on the streets than before the pandemic once the lockdown ended. This was not the case for us and we are delighted that business in our stores has picked up so well." quickly."
Disruptions in the global supply chain that affected companies in all sectors were one of the challenges we faced last year. The invasion of Ukraine by Russia resulted in a significant decrease in the frequency of customers in our stores and our income suffered. DEICHMANN withdrew from the Russian market in an orderly manner. "This strategic move sends a clear message in support of peace and against the dire humanitarian impacts of the Ukrainian war," said Heinrich Deichmann.
Throughout the year the inflation rate increased. Although the upward trend had already started earlier, it was amplified by the war in Ukraine. Both businesses and consumers have been affected by the significant increase in energy, gas, oil, electricity and food prices. "All of this has caused customers to tighten their belts, and companies like us have been forced to keep a close eye on the inevitable cost increases. So there have been many challenges we have had to deal with in 2022 and which we will also have to deal with in the future," explained Heinrich Deichmann. "That's why we're even more pleased that we all got through a difficult year so well. I'd like to express my appreciation for the support of our dedicated team and our partners, many of whom have been associated with us for a long time, and of course also from our loyal customers."
Heinrich Deichmann describes the group's profits as satisfactory. "We are a strong organization that can continue to expand without external funding in the future, which means that we will retain our corporate independence," underlines the owner of the company. DEICHMANN SE remains 100% owned by the founding family.
International success continues
The year 2022 was not only one of crisis management in the DEICHMANN Group, but also of constant use of opportunities. In early 2022, the group acquired two US sneaker retail chains, Jimmy Jazz and Expressions, with a total of 189 stores. The stores of both chains are now managed under the SNIPES brand. A Polish shoe chain called Distance, with 28 stores, and another chain in Croatia, Shooster, with 15 stores, were also acquired for the SNIPES brand.
SNIPES has been part of the DEICHMANN Group since 2011 and since then it has not stopped expanding. At the end of 2022, SNIPES had some 700 stores in twelve countries. Its target audience is similar to that of the two new acquisitions in the United States. "We have made significant investments in the US, where we expect sustainable growth in this market segment, and last year's results confirm these expectations," said Heinrich Deichmann, commenting on the acquisition.
The second pillar of the DEICHMANN concept, the American chain of family shoe stores RACK ROOM SHOES, also registered a very satisfactory commercial evolution with very good results. In addition, companies in Switzerland and Türkiye performed very positively.
2023: investments at a record level
Significant investments are also planned for 2023. The expected expenses for the entire group are around 500 million euros. This is the highest annual investment budget in the company's history, with nearly half going to Germany. It will invest in the modernization of the store network and the opening of new ones, as well as in international expansion, digitization and logistics.
The group will continue to invest its own funds in organic growth and plans to open some 200 new stores around the world. "We continue to firmly believe in street stores. They are our pillar. Our investments will ensure that stores look more attractive and offer a special shopping experience to customers. We will continue to bet on stationary commerce and dynamic urban centers," he stresses. Heinrich Deichman. Especially strong growth is anticipated in Italy, where some 30 new DEICHMANN stores will open in 2023 as part of the ongoing expansion program.
Group-wide expansion plans also include stores operated by our franchise partner, the AZADEA Group. More stores will open in the Arabian Peninsula following our successful market entry in Dubai in 2019, Kuwait in 2020 and Qatar and Oman in 2021/22. The opening of the first stores in Abu Dhabi and Saudi Arabia is scheduled for this year.
New store concept for a more attractive shopping experience
The brand experience that DEICHMANN offers its customers is being further optimized. New and creative advertising campaigns have been launched to wow consumers. DEICHMANN wants to offer customers a pleasant shopping experience and simplify it on all channels. For this reason, the largest European retail shoe company continues to invest in its network of stores. It currently plans to modernize some 450 stores throughout the group throughout this year. The new pioneering concept that will shape the image of the stores was developed within the framework of an international collaboration, and is now being implemented successively throughout the group. DEICHMANN takes another step into the future by introducing a new store design concept with a modern look, spacious feel, soft colors and plenty of space for sporting goods. Open ceilings, colors that guide clients through defined areas and modified furniture are some of the characteristics.
Another highlight is the extensive men's and women's sports department, which includes an attractive wall of sneakers from brands like Adidas, Nike, Puma, FILA, Reebok, Asdics and Skechers. Sport remains one of our central themes," says Heinrich Deichmann. "We have intensified our strategic partnerships with sports brands to make fashion brands accessible to everyone. And that's why we're selling a range of sportswear and accessories in some of our stores and on our online store."
Smart retail: the perfect mix of online and offline
New services, the expansion of our portfolio and the connection between the physical store and our online store are playing a very important role. An example of smart retail is the digital foot measurement devices that were launched in DEICHMANN stores last summer. They help us determine shoe sizes even more accurately, making the shoe shopping experience even easier and more convenient for our customers. Digital foot measuring devices are available in around 120 shops in Germany. Digital devices are expected to replace physical foot gauges in all stores. Since the introduction of new digital devices some 300,000 feet have been measured. This extensive database will help us in the future to better tailor our product range to customer needs.
An impressive portfolio of brands
The DEICHMANN brand portfolio has also continued to expand. "We have seen the success of new brands as part of our portfolio. For example, our range now also includes selected models from the popular brand New Balance," said Heinrich Deichmann. "All of these brands significantly enhance our good product portfolio in the eyes of our customers." Rielera will also supply models for the DEICHMANN concept starting this year. Cult skate fashion brand AIRWALK is another new addition to our range.
Strong growth in Germany
In 2022, the group experienced new growth in Germany. Revenues were around €2.5 billion (€2.1 billion net) (2019: €2.4 billion gross). Like-for-like store growth was nearly 9%. Last year, the group sold 69 million pairs of shoes in Germany in its 1,400 stores and online stores. At the end of 2022, the DEICHMANN Group had a workforce of around 16,400 employees in Germany, including 2,800 apprentices. Heinrich Deichmann: "We are grateful that we did not have to lay off any employees or close any stores as a result of COVID-19." By 2023, the opening of around 30 new stores is planned throughout the group in Germany and the modernization of 150 stores.
Investments in logistics infrastructure
When a retail business expands, supporting functions like logistics have to grow with it if it is to continue to run successfully. Today, logistics operations have to cover the needs of high street stores, as well as e-commerce and Unichannel business. For this reason, DEICHMANN is making constant investments in its logistics operations. The first project involved the Swiss subsidiary and the construction of an additional modern Unicanal distribution center. The storage infrastructures and capacities of DEICHMANN and SNIPES will also be expanded successively in Germany.
From shoemaker's workshop to ultramodern campus
DEICHMANN SE's headquarters are still in Essen, Germany, right next to the shoe workshop where the company was founded in 1913, 110 years ago. Today around 1,000 people work on the Essen campus. The DEICHMANN headquarters was named one of Germany's top employers in 2023 by the independent Top Emplomes Institute.
A new building is currently under construction on the company campus on Aktienstraße in Essen-Schönebeck, and the existing building is being modernized. The campus is synonymous with modernity, international orientation and recreational value. A five-story atrium building is the centerpiece of the development and renovation project. The new and prestigious building with underground parking, surrounded by landscaped green areas, will be the new entrance to the campus.
Once the engineering works of the foundations are completed, in the coming months attention will be focused on the construction works. Heinrich Deichmann: "This is a forward-looking investment and a sustainable commitment to Essen as the location."
Modern and pleasant working environments will be created, and the construction project is based on an overall green concept that takes into account current developments in energy supply and management, for example with geothermal and photovoltaic systems. In addition, the neighborhood will be gentrified with modern, architecturally sophisticated buildings and an attractive park with excellent recreational value. Completion is scheduled for 2025.
Greater social commitment with aid organizations and foundations
"The company must be at the service of the people" is the philosophy that underlies the declaration of principles of the DEICHMANN Group. The family that owns it believes in the importance of a people-oriented company culture motivated by Christianity. In this context, the company's DEICHMANN Foundation, which celebrates its 50th anniversary this year, supports many of the humanitarian aid projects of the Christian aid organization Wortundtat in Germany and abroad. The most recent example is the prompt donation of one million euros donated by the DEICHMANN Foundation to provide emergency aid to people affected by the devastating earthquake in Turkey and Syria. Project partners with experience in the earthquake-affected regions of Turkey and Syria can now provide quick and hassle-free assistance to people in need.
During the past year, Deichmann renovated and updated the stores in: La Zenia (Orihuela), Gran Plaza (Roquetas), Gran Vía (Alicante), Puerto Venecia (Zaragoza), El Ferial (Parla) and El Faro (Badajoz), as well as as two reopenings in Portugal, in Almada Fórum (Almada) and Fórum Sintra (Sintra). In addition, it opened new stores in Plenilunio (Madrid), L'Epicentre (Valencia) and launched into a new national market, with the opening of three new stores in the Canary Islands (Lanzarote, Tenerife and Gran Canaria), one of the markets pending and in which new openings are expected in 2023.
During the first quarter of 2023, Deichmann has renovated five stores in the shopping centers of La Cañada (Marbella), Nueva Condomina (Murcia), Área Sur (Jerez de la Frontera), Holea (Huelva) and Miramar (Fuengirola). Deichmann will continue with its national and international expansion strategy and plan planned for 2023, with a clear commitment to reinforcing Deichmann's presence in the national market, where it currently has 70 stores in the main cities of Spain, located in the better and busier shopping centers, as well as promoting, innovating and renewing its online sales channel www.deichmann.com in Spain.
More information about Deichmann:
On the brand's official website: https://www.deichmann.comAnd on its social networks:
DEICHMANN SE, based in Essen, Germany, was founded in 1913 and is still a 100% family business. It is the European leader in the footwear retail market and is present in 31 countries around the world. The company has more than 48,000 employees and operates more than 4,500 stores, as well as 41 online stores. In addition to the DEICHMANN stores, the company owns the chain MyShoes, Dosenbach, Ochsner Shoes and Ochsner Sport in Switzerland, vanHaren in the Netherlands and Belgium, and Rack Room Shoes in the United States. It also owns the SNIPES Group, with stores and online stores in Europe and the United States.
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