Adolfo Domínguez rules out further store closures in the short term

Spanish fashion brand Adolfo Domínguez has dismissed concerns that it will continue with a store closure programme it launched four years ago. The brand has gone from having 544 stores in 2015 to just 391 in 2019, closing 153 stores over four years.

This was confirmed on Tuesday by managing director Adriana Domínguez at a conference organised by business school Esade in Barcelona, where she outlined her plans for the company, its challenges and transformation.

In the 2018/19 financial year, Adolfo Domínguez made 112 million euros in sales, down 1.6% on the previous year, and reported losses of 500,000 euros. However, the company saw a positive operating profit of 1.2 million euros for the first time in seven years.

During the period, Adolfo Domínguez closed 18 stores following the merger of its brands and used a legal procedure called ‘Expediente de Regulación de Empleo’ (ERE) to make 56 jobs redundant.

According to Domínguez, the changes were part of a new business model led by her since she joined the company as managing director in 2017. The plan was influenced by the changing market conditions in wholesale in the digital era.

“The rise of online shopping has caused changes to consumer behaviour and the way consumers interact with brands,” said Domínguez, adding that “to capture the collective interest of consumers it is no longer imperative to have physical stores.”

Due to this, the company has focused in recent years on reducing the size of its stores to 200 square metres and investing in new ways to attract new customers, such a social media and ecommerce.

Adolfo Domínguez’s managing director offered the reopening of the brand’s store on Paseo de Gracia in Barcelona as an example of this new business model. The 300 square metre space completed the merger of the brand’s labels and introduced a new visual identity.

When asked about the company’s performance in the current financial year, Domínguez declined to disclose any information until the release of its third quarter results, but highlighted the “strength” of the online business.

In fact, Adolfo Domínguez’s online sales grew by 70% in the 2018/19 financial year, and now account for 10.6% of revenues. Its customer acquisition grew “exponentially” via social media and other non-retail channels. “The future is digital,” said  Adriana Domínguez.