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Press Release Press Release DEICHMANN Group turnover increases by 5.9 per cent to 5.8 billion euros in 2017; Continuing on the road to success with omnichannel: “The best of both worlds”; Like-for-like sales growth of 2.8 per cent; Successful market launch in France and Belgium Over 176 million pairs of shoes sold worldwide / Record-level of investments planned for 2018 / Continued focus on omnichannel strategy ESSEN, March 2018. In 2017, the DEICHMANN Group sold 176.6 million pairs of shoes in its stores and online shops worldwide – over three million pairs more than in the previous year. In 25 European countries and in the USA, the group generated a gross turnover of 5.8 billion euros (net: 5 billion euros) in the past financial year – the highest in a company history spanning more than 100 years. The currency-adjusted turnover increase was 5.9 per cent. And the company was also able to generate like-for-like sales growth of 2.8 per cent. At the end of 2017, Europe’s largest shoe retailer was running a total of 3,989 branches and 36 online shops, employing a staff of 39,564. In 2017 the group successfully entered the market in another two countries: France and Belgium. For the current year, DEICHMANN is planning record-high investments: 245 million euros are being invested in the international infrastructure and further digitalisation, 102 million of which in Germany alone. “2017 was another successful business year for us,” sums up Heinrich Deichmann, Chairman of the Management Board of DEICHMANN SE. “An important indicator for me is that we have also continued to grow like-for-like in stationary retail. But at the same time, we have shown that we are on the right path with our online shops and omnichannel approach.” In his opinion, there were several factors that contributed to this success. - With its collections, DEICHMANN really appealed to the tastes of its customers in 2017, and the Star Collection with singer Ellie Goulding also played its part in this. - The omnichannel concept has been further developed. 1 - The new shopfitting concept at DEICHMANN and favourable weather conditions with snow in December also contributed to the good result. “We are the only store in the footwear industry that can offer customers the combination of a modern online shop and a nationwide network of branches,” said Deichmann. “This model offers customers maximum flexibility. In our bricks-and- mortar stores, our employees are on hand to advise our customers. No exclusively online retailer can offer such a level of service and human interaction. That’s what makes us unique and helps us stand out from our competitors. We are now working on further improving the associated services for our customers and creating a seamless shopping experience. We want to offer our customers the best of both worlds.” In 2017, the gross turnover of DEICHMANN SE, which has its headquarters in Essen, Germany, was 5.8 billion euros (net: 5 billion euros). Viewed across all countries, the entire DEICHMANN Group achieved a currency-adjusted sales growth of 5.9 per cent. Like-for-like sales grew by 2.8 per cent. Worldwide, the group sold 176.6 million pairs of shoes (compared to 173.2 million in 2016). This means that the company has once again grown faster than the industry as a whole, both internationally and in Germany. At the end of 2017, the DEICHMANN Group was employing a staff of 39,564 in Germany and abroad – around 1,300 employees more than in 2016. “We achieved these good results in a difficult environment with increasingly tough competition. Our focus is always on the customer. And our idea of offering affordable, fashionable and high-quality shoes to the general public is still as relevant as ever. The fact that we have also been doing this online for many years, with constant improvements to increase the efficiency of the cooperation between our stores and online shops, has paid off once again. “We usually record double-digit growth rates in our online shops,” reported Heinrich Deichmann. Successful market launch in France and Belgium Last year, the company group was represented in 25 European countries and the USA with 3,989 branches and 36 online shops. 60 per cent of its turnover is meanwhile generated abroad. But Germany continues to be the most important market. However, the trend towards a higher share of foreign sales will further reduce 2 the company’s dependence on one single market. In 2017, it opened its first branches in France and Belgium. Dutch subsidiary vanHaren launched five stores and an online shop in Belgium last year. The plan is to open another five stores this year. There are meanwhile two DEICHMANN stores in France and, since the market launch, also an online shop. Another four openings are planned for the first half of 2018. Heinrich Deichmann described the financial position of the family-run company, which was established in 1913, as still satisfactory. It allows the company to finance the expansion on its own, without having to rely on borrowed capital. This gives DEICHMANN the necessary flexibility to plan for the future and remain an independent family company. Investments in Germany and abroad at record level In 2018 the company will continue to expand its network of stores on an international level, but with a focus on qualitative growth. The DEICHMANN Group is planning on opening another 208 branches worldwide. Around 270 stores will be modernised – more than ever before. Investments are therefore at a record level. For this year, the company is planning investments to the value of 245 million euros, 102 million euros of which will be allocated to Germany. This will primarily be invested in the modernisation and expansion of the network of stores, as well as in IT, digitalisation and logistics. Growth also in Germany Last year the group was running 1,463 branches in Germany, 39 more than in the previous year. 74.2 million pairs of shoes were sold in stores and online, a plus of 1.5 per cent. The turnover increased to 2.3 billion euros (net: 2 billion euros), which is equivalent to 5.1 per cent more than in 2016. Like-for-like, this represents an increase of 3 per cent. At the end of 2017, the DEICHMANN Group was employing 15,977 members of staff in Germany (2016: 15,746), including around 3,000 trainees. Around 440 new recruits are planned for 2018. In 2017, 1,185 young people began a traineeship at the group 3 in Germany. And over 1,000 new trainees will be employed again this year. For the first time, the company is also offering a traineeship in e-commerce. A staff of 840 is meanwhile employed at the main headquarters in Essen. Reflecting the group’s international growth, this number of employees at the headquarters, where services for the group are also carried out, is also continuing to grow. DEICHMANN is therefore also extending its company headquarters by adding a new office building. A three-storey new build with underground parking is currently under construction and will create new workplaces for 130 employees on a gross floor area of 2,300 m². Completion is planned for summer 2018. In Germany, the group is planning 33 new stores and the modernisation of 128 stores. Digital offensive continues Last year, the DEICHMANN Group was running 36 of its own online shops and also sold its products via six online platforms such as eBay. As a pioneer in the e- commerce sector – back in 2000, DEICHMANN was the first shoe retailer to sell its products on the internet – today the company is consistently pursuing an omnichannel concept with offers like their home delivery service “Ship to Home”, which takes customer orders for out-of-stock shoes in the store and then delivers them directly to their door. The online shop was given a facelift in 2017 and is now even more straightforward to navigate. “Ship to home” is also being further expanded in Germany. Since autumn 2015, customers who cannot find the right size or colour of the style they want in stores have been able to order it with the “Ship to home” service in store and have it delivered to their home free of charge. The branches can meanwhile now also access the entire stock available across all stores, rather than just the stock of the online shop. Digital customer magazine and fashion blog DEICHMANN is also becoming increasingly digital in the communication with its customers. Since last year, the customer magazine “SHOE FASHION” has also been available as an online version. At https://shoefashion.deichmann.com, readers will 4 find everything that the print magazine offers – plus online specials with videos and direct links to the online shop. The DEICHMANN fashion blog at https://shoelove.deichmann.com was relaunched at the end of 2017. All digital offers also link directly to the online shop. The new version of the DEICHMANN app was launched at the beginning of March 2018. Now it is even easier for customers to browse the DEICHMANN online shop on their mobile phones. The offer of the “Online Exclusive” collection is also being extended. This collection includes particularly fashionable shoes that are only available online. Shoes for sports that were not previously available have now also been added to the range, such as for basketball or tennis, for example. DEICHMANN launches “Influencer Club” For a number of years now, DEICHMANN has been working on different levels with bloggers and influencers – for example on blogger collections with various influencers since 2014.
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