Adolfo Dominguez plans global expansion to cover losses

19 Jul '11

2 min read

Spanish fashion brand Adolfo Dominguez is expanding internationally while closing its outlets nearer home, in its bid to cover losses and return to positive figures.

The company opened 105 new outlets last year ranging from Latin American countries like Brazil, Colombia, and Venezuela, to countries in the Middle East like Lebanon and Turkey. At the same time it closed its 33 existing non-profitable stores that included 26 in Spain.

Adolfo Dominguez, which has 665 outlets globally, posted a loss of €4.7 million last year, due to the declining GDP and increasing unemployment in Spain, which led to a decrease in consumption, particularly in the apparel sector.

For opening its new stores worldwide, the company is betting on the option with minimal risks, i.e. the franchise model, as it needs less funding. At present, in spite of good sales achieved in other countries, it has not been adequate enough to absorb the losses due to decline in sales in Spain.

Among its other measures to recover losses, Adolfo Dominguez will reduce costs. Last year, the salaries of staff rose 1.5 percent, even after putting a freeze on the salaries of directors. This was offset by the decline in company's operating expenses, which were down 7 percent.

Fibre2fashion News Desk - India

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