Spartoo keen to consolidate core business after “brutal” fiscal year

In 2023, the business volume generated by French footwear retailer Spartoo fell by 4.5% to €200.2 million. Although the figure was 12.6% above the volume generated in 2019, Spartoo isn’t planning to open any new stores in 2024. A prudent approach that is warranted by a fiscal 2023 that Spartoo regards as “extremely harsh and brutal.” Revenue slumped last year, falling by 4.1% down to €142.9 million.

A downturn that according to Spartoo was due to a late, rainy spring and to a non-existent winter, the latter hampering sales of heavier models like boots and booties. “And of course there’s inflation,” said Spartoo’s CEO Boris Saragaglia on Wednesday morning. “Whatever you say, expenditure on energy, food and rent now absorbs 80% of household budgets. Anything else is purely academic,” he added. Saragaglia underlined the disparities between markets where Spartoo achieved satisfactory results, like Spain, Italy and especially Germany, and struggling ones like France and Eastern Europe.

Spartoo commercialises over 10,000 brands across some 30 European countries, a range broader than that of Sarenza or Zalando, and reportedly sold more than three million pairs of shoes in 2023. Last year, Spartoo opened 15 new addresses, and now operates 13 directly owned stores and 10 franchised ones, as well as 21 department store concessions, plus three Aldo stores.

“We were disappointed with [Aldo’s] launch,” said Saragaglia, adding that the range was perhaps too limited and too British in style to win over European consumers, and that no new openings are on the cards this year. “We will have to make a decision about some of the loss-making stores. We’re predicting three tough years for consumption expenditure in general,” he added.

Proprietary brands and third-party logistics

Spartoo now commercialises 16 proprietary brands, either developed in-house or acquired, as is the case for JB Martin, Pellet, Easy Peasy and BGG. In fiscal 2023, these brands helped the group’s wholesale revenue grow by 21%.

Spartoo’s third-party business, in other words running logistics operations for other companies, also increased and is now worth €20.2 million, accounting for 10.1% of the group’s revenue, notably thanks to 38 new clients.

Adjusted EBITDA improved, growing by 1.3% to €1.9 million. Operating cash flow turned positive, improving from -€23.6 million in 2022 to €0.7 million in 2023. Inventory fell by 20.5% in volume to 1.4 million units, and by 13.7% in value, to €45.6 million.

The number of active online customers fell from 1.8 million to 1.6 million. “We have been targeting more affluent [consumers],” said Garavaglia. The average purchase basket before returns was €88, up from €80 two years earlier. The cost of acquiring a new customer fell to €10.8, compared to €14 the previous year, as Spartoo reduced its marketing expenditure, after a TV campaign in 2022 delivered disappointing results.