Total sales dropped slightly to €268 million at Lotto Sport Italia on a wholesale-equivalent basis in 2014, down from €273 million in the previous year. Net earnings were more or less flat as compared to the 2013 level of €3 million, but the operating margin before amortization (Ebitda) improved considerably to about 9 percent of sales, following the previously implemented rationalization of the staff and the product ranges.
As in 2013, sales of footwear went up, while apparel sales were dragged down because of the competition from the new activewear offerings of vertical retailers like H&M and Uniqlo. Lotto has reacted by developing a more functional image for its branded clothing, also for everyday wear, and by launching new women-specific ranges in running, tennis, fitness and yoga, which helped to stem the tide.
The Italian brand recorded a relatively strong increase last year in running and jogging shoes. Its overall sales of running apparel doubled. A more moderate increase was registered in tennis. Conversely, Lotto suffered a small drop in football and futsal, due to the strong competition from the major brands, but it hopes to reverse the trend this year in view of a positive response to the introduction of its new Zhero Gravity VII 200 range.
The Lotto Leggenda collection of lifestyle sneakers scored a 20 percent increase in Italy last year, and the management sees sales of the line doubling in 2015 thanks to a clean, selective distribution of the line in high-end shoe and sportswear shops in Italy and elsewhere. After a successful test with nearly 30 points of sale in Italy during the past winter season, Lotto has set up a direct sales force for Lotto Leggenda in Italy as well as France and Spain.
Lotto's overall sales dropped by 2 percent last year in Italy, but the company's chief executive, Andrea Tomat, hopes that they will increase in 2015. Sales in the rest Europe rose by 6 percent in 2014, but they declined in the rest of the world, due in part to exchange rate movements. Lotto's business in China through Li-Ning was steady last year. The company has a new distribution partner in Indonesia.
