Monday 23 April 2018

Spanish fashion chain bucks trend to send owner into billionaire's club

Tom Metcalf and Zohair Siraj

Dressed in nothing but their lingerie and boxer shorts, more than 300 shoppers lined up outside the Desigual shop in the Soho neighbourhood of New York City last September for a free outfit.

"I got out here at 1am," said one customer in a video posted by the company on YouTube, her driver's licence stuffed into a pink bra as bypassers snapped pictures of the crowd, who were attending a marketing event Desigual called an Undie Party.

She emerged from the store hours later, posing in a black and green jacket. Other shoppers screamed with glee as they walked away in the colour-splashed designs and prints the retailer is known for.

Such promotions – and others, like kissing festivals in London, Paris and Berlin – have helped make Thomas Meyer, the 50-year-old founder and owner of the Barcelona-based fashion chain, a billionaire.

Desigual, which is Spanish for "atypical," has tripled its annual sales in the past five years to €700m, according to Orbis, a database of company information published by Bureau van Dijk.

The company sold more than 22 million garments in 2012 through 330 of its own stores and 11,200 other points of sale in more than 100 countries.

Meyer has a net worth of at least $1.1bn (€840m), according to the Bloomberg Billionaires Index. He has never appeared on an international wealth ranking.

"Desigual is a very unique, fast-growing brand that is doing well globally," says David Haigh, chief executive officer of Brand Finance, a London-based consultancy.

Brand Finance releases an annual report on the most valuable publicly listed fashion companies in Spain. "They are very differentiated from other fashion brands. Their garments are edgy and complex."

Desigual joins a select group of Spanish fashion companies that have flourished in a home market experiencing youth unemployment of more than 50pc and declining GDP in all six quarters since July 2011.

Chief among them is Amancio Ortega's Inditex, the world's largest clothing retailer. Its shares rose 64pc in 2012, helping the 76-year-old Spaniard to pass Warren Buffett as the world's third richest man. The Swiss-born Meyer founded the company in Ibiza, Spain, at age 21, having spent previous summers selling T-shirts on the Mediterranean island known for its nightlife. One of his first popular products was a denim jacket made from discarded jeans, which led him to open his first shop in 1986.

Meyer was exporting clothing to France and Portugal within a decade. He focused on bright prints and colours for the clothing and finding prime locations for the stores, such as its flagship London store on Regent Street.

The company's new chief executive, Manel Jadraque, told business publication 'Textile Industry' that he expected Desigual to have an earnings before interest and taxes margin of 18pc in 2012, 28pc more than the average margin of Urban Outfitters and Supergroup.

In January, Desigual took out its first loan, borrowing €200m to fund expansion into Asia and Latin America, 'Textile Industry' reported.

According to a 2008 account in the Spanish newspaper 'El Mundo', Meyer prefers to remain in the background, declining interviews and avoiding Desigual store openings.

Those who know him say he is more open in private, the article said, citing people who asked not to be identified.

"In money matters he is Swiss," the newspaper quoted an acquaintance as saying. "Otherwise he is very Spanish."

Irish Independent

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