Massimo Dutti It is part of Inditex, but it has always been a brand with a special identity of its own, reflected in a clear focus on men’s fashion, in its Catalan roots and in collections far removed from the fast fashion.
For years, the brand was firm in its positioning and had constant growth: in 2019, before the pandemic broke out with force and seriously impacted economic activity and the textile business, it reached almost 2 billion in turnover.
Massimo Dutti is also the chain where the impact of the health crisis has been greatest. In 2020, it cut its income by 37%up to 1.197 billion euros. It had the largest percentage drop of any company in the group.
Business Insider Spain Massimo Dutti continues a series in which he will review the brands that make up the Inditex empire, its model, its edges and its main challenges.
Origin and why of Massimo Dutti
Massimo Dutti was founded in Barcelona in 1985. It was promoted by Armando Lasauca, who opened his first store in Barcelona.
Initially, they only sold men’s shirts in 2 or 3 different models, although with variations in fabric and colour. Their garments were even sold in El Corte Inglés.
When Inditex acquired it in 1991, the firm already had its own identity.. Its franchises already covered a large part of Spain and Amancio Ortega’s group sought, with this move, to promote a change of image that would identify it with higher quality clothing and not low prices.
Massimo Dutti launched its women’s line 4 years later, although its target audience was still male.
Like other brands of the group – such as Uterqüe, Stradivarius or Bershka – Massimo Dutti’s operational headquarters is in Tordera-Palafolls, in Catalonia.
How has your career evolved in recent years?
In 2002, in the first results of Inditex as a listed company, Massimo Dutti invoiced 287.3 million eurosIt was the third chain in terms of revenue, only behind Zara and Bershka.
After growing by 13% in 2011, its turnover broke the barrier of 1 billion euros. From 2015 onwards, it continued to grow, but unevenly and at a slower pace than other brands such as Pull&Bear.
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Until 2017, its sales grew at an annual rate of 8%. In 2018, the growth was just 2%, and in the year before the pandemic, it managed to recover to 5.43%.
What was your worst year like?
According to the company’s public figures, Massimo Dutti is the brand where the impact of the health crisis has been greatest.
The year of COVID-19, cut its revenue by 37% to 1.197 billion euros, the largest percentage drop in the entire group, followed by Uterqüe (-34.7%). You have to go back to 2012 to find a similar turnover (1,134 million).
74 fewer stores in one year: this is what its commercial network looks like today
The Massimo Dutti retail network had 654 points of sale as of July 31, which is 74 fewer than a year earlier..
The maximum threshold was reached in 2017, with 780. Since then, their number has been falling year after year until closing 2020 with 677 establishments, which meant returning to the 2013 level (665).
In June 2020, Inditex made an important operational decision: absorb 1,200 establishments, of which between 250 and 300 were in Spain.
What is their audience like and what can you find in their stores?
The brand is aimed at a more adult audience than the other brands. Its clothes, both for women and men, could be defined as the most classic and timeless of the whole groupGalician.
For its campaigns and communication actions it uses references from the world of fashion such as top model British Poppy Delevingne. It is also common to see Kate Middleton or Queen Letizia wearing clothes from the brand.
Who is at the helm of the flag?
Since 2000, the chain has been run by Jorge Pérez Marcote, brother of Flora López – Amancio Ortega’s wife – and the director of Zara. According to sources within the group, he is one of Ortega’s most trusted men.
Last summer, its financial director, Ramón Rubio, left the group after more than 20 years at Inditex. “He was part of the landscape. He was really the one who ran the company, all the decisions went through him,” they explain.
Teleworking and the ‘casualization’ of men’s fashion: the crossroads
The focus on men’s fashion was for decades its great competitive advantage, but today it is the Achilles heel from Massimo Dutti. Teleworking as a new work paradigm also has a direct impact on its business.
Between 2019 and 2020, The men’s fashion business fell by 42.3% to 3.355 billion euros, according to data from the sector’s employers’ association Acotex.
“A progressive casualization “The decline in men’s fashion has caused the brand’s more formal clothing to lose momentum, and its garments have a higher average price,” according to sources close to the company.
Other sources agree: “It was difficult to grow. Every year the number of items on sale got worse and that affected the margin, and in addition to being one of the brands that grew the least, they were also the least profitable.”
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Tags: Commerce, Trending, Fashion, Inditex, Coronavirus