Adolfo Dominguez reduces its losses helped by strong EBITDA performance

Adolfo Dominguez has reported a substantial reduction in losses for the nine months to the end of November, down 27.2% on the previous period to 12.3 million euros (around $13 million).

The Spanish designer brand said its strong EBITDA performance (up 24.9%) and a lower depreciation expense helped bring its losses for the period down.

Total sales increased 1.4% during the nine months, with same-store sales growing 3.6%.

These very are good news for the company, which hasn’t seen its sales rise in nine years, it admitted in a press release. Sales for the nine month period reached 73.05 million euros ($77.5m), compared with 72.057 million in 2015.

In the third quarter, Adolfo Dominguez increased sales by 6.1%, with EBITDA nearing 1.05 million euros ($1.1m), versus an EBITDA loss of 3.6 million in the prior year’s period.

The group, which has 521 stores, has now an improved financial position with net cash of 2.1 million euros ($2.2m), compared with a net debt of 19.4 million euros in the same period last year (about $20.5m).

In the 12 months to 30 November 2016, Adolfo Dominguez closed 35 unprofitable stores including 20 stores in Europe. The move was part of an effort to turn the company around, however the store closures also meant that the company generated up to 3.7 million euros less in sales.

Adolfo Dominguez has been without a CEO since the departure of Estanislao Carpio in July. Shortly after, it was announced that former Inditex executive Costas Antimissaris would take up the reins of the retailer, however it was later revealed that he had never joined the brand.

Additionally, the business has announced the departure of board members José María García-Planas, Elena González and José Luis Nueno Iniesta. The latter represented Puig, the company’s second largest shareholder.

Replacing Elena Gonzales and Jose Marian Garcia-Planas are Juan Manuel Fernandez Novo and Adriana Dominguez, daughter of founder Adolfo Dominguez. Their appointments are subject to approval by the company’s shareholders.

If approved, Adolfo Dominguez’ senior management will include ten people.