Le Coq Sportif started a turnaround last year, posting stable sales and a much reduced loss. The French brand is banking on significant investments in European football to improve its profit margins this year, as part of its latest plan to put more emphasis on technical clothing and other performance products.
The investments are currently managed by Marc-Henri Beausire, following the departure of the French brand's chief executive, Frank Heissat, around the end of last year. Heissat had joined Le Coq less than two years ago, after playing important roles at companies like Oxbow, Puma and Oakley, where he had acted as vice-president in charge of Europe, the Middle East and Africa. Heissat has started supporting start-ups and taking up assignments as a consultant in the sports and digital fields while considering other options.
It is not clear whether Beausire will remain CEO of Le Coq, a brand that he had run in the past, prior to its takeover by Airesis in 2006. He is already the CEO and a shareholder of Airesis, the Swiss holding company that owns 78 percent of the French sports brand. Just over 50 percent of Airesis' voting rights are held by a group of investors formed by Beausire, the heirs of Robert Louis-Dreyfus (the late former CEO and major shareholder of Adidas) and Petrus Finance, an investment company in which Beausire is one of the major shareholders.
Another recent high-profile departure has been that of Cyril du Cluzeau, the company's global marketing director, who left in December. He had joined the French brand in 2012 after many years at Nike, his latest function at the company being that of marketing director at Nike France. His tasks at Le Coq have been spread between team members and consultants. The social media indicate that Du Cluzeau has become a consultant.
Airesis reports that Le Coq's sales reached about €100.6 million last year. This amounts to an increase of less than 0.2 percent compared with 2013, when sales shrunk by about 15.5 percent in euros. The largest share of sales comes from France, Italy and Spain, where the company has subsidiaries.
Le Coq's sales of footwear, which still make up an estimated 80 percent of the brand's turnover, stabilized after a sharp decline in 2013, while its sales of apparel grew by 8 percent. The company has been investing in the last few years to stimulate its performance-apparel business. It made investments in an apparel development center in Romilly, the small French town near Troyes where the brand was launched, as well as in marketing and equipment partnerships. Le Coq returned to the Tour de France and obtained an endorsement deal with Richard Gasquet, a leading French tennis player.
Both of these sponsorship activities are reminiscent of the brand's heyday, when it was most active in cycling and later in tennis with endorsees such as Arthur Ashe and Yannick Noah. The latest investments in football include another return to the brand's past: It has sealed a five-year partnership starting from the next football season with AS Saint-Etienne, the French team that already sported the rooster on its emblematic green shirt during some of its most successful years in the seventies. ACF Fiorentina is another prominent European club that has agreed to wear Le Coq Sportif from next season, ending a deal with Joma.
The brand was impacted by a decline of about 5 percent in royalties last year. On a wholesale-equivalent basis, Le Coq Sportif's turnover declined by 0.7 percent to €191.5 million. However, its online sales soared by 50 percent and its own retail sales were up by 22 percent.
This contributed to a rise in the brand's gross margin, up by two percentage points to 45 percent. However, long-term investments in the brand still affected its operating result, which remained slightly negative. Le Coq ended the year with a net loss of €3.0 million, which was nearly half the €5.8 million loss suffered in 2013.
The entire Airesis group reached sales of 122.3 million Swiss francs (€117.9m-$124.8m), down by 1.5 percent, and it ended the year with a net loss of CHF 4.6 million (€4.4m-$4.7m), against a profit of nearly CHF 8.9 million in the previous year. The comparison is distorted by the divestment of Boards & More, the board sports equipment company, which yielded a net gain of nearly CHF 17.9 million (€17.3m-$18.3m) in 2013.
The Swiss group said that it was currently focusing on Le Coq Sportif but remained open to acquisitions, without any particular timeline. The company says that the French brand's expansion in the coming years should be boosted by the development of its apparel range as well as investments in a few performance sports and new market and distribution channel prospects, particularly in the U.K. and online.
