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CCC Group has decided what the company’s development strategy will look like in the next few years. CCC’s board of directors has adopted a project called “GO.25 Everything Fashion, Omnichannel Platform”, which involves not only increasing revenues but also changing existing activities.
The Covid-19 pandemic has affected the clothing and footwear sector, changing customer habits and preferences. Therefore, the CCC Group has decided to modify its existing strategy, in order to best adapt to the new reality of the industry. According to the company, the pandemic has reinforced certain market trends, such as the development of digital sales and has increased the importance of the different stages of the shopping process. New payment methods have emerged, as well as various delivery options, including same-day delivery and express delivery. In addition, the awareness of both customers and companies regarding environmental responsibility has increased.
CCC has achieved a number of key objectives under the current “GO.22” strategy, which has influenced product development and marketing communications, allowed for the introduction of technology and digitalisation, and modernised online sales channels, offering customers new tools and services. CCC also decided to eliminate non-strategic assets and projects.
The CCC Group’s plan until 2025
The new strategy, to be implemented until 2025, is the company’s response to the changes taking place in the industry. In its new growth plan, CCC Group wants to triple its revenue compared to the third quarter of 2021 and achieve a consolidated EBITDA margin (from IFRS16) above 12%. In addition, CCC plans for the share of the revenue from new categories unrelated to footwear to be around one-third, and the share of sales from online channels to increase from 45%, which was recorded in the third quarter of this year, to 60%. The NPS (Net Promoter Score) indicator is also to improve, and the change is to amount to 10 points for each brand or sales channel in the CCC Group. Another indicator to be modified is the employee engagement index, and the group plans for it to increase by a minimum of 10 points above the sector average. The company also wants to achieve an MSCI ESG rating of A+.
In the new development plan, the management board of CCC has singled out objectives for the individual brands belonging to the Group. The strategy for the CCC brand assumes achieving the leader position in omnichannel footwear sales in Central and Eastern Europe. The CCC brand is to focus on optimizing and digitalizing the sales network, as well as strengthening its own brands. By 2025, this part of the CCC Group is to generate 25-30% of shares in revenues. A larger percentage of shares, as much as 30-35%, is to belong to the Eobuwie brand, which deals with online footwear sales in CEE countries. Eobuwie will expand its operations in foreign markets as well as create new sales channels.
The strategy also includes fashion brands belonging to the CCC Group. Both Modivo and HalfPrice are to generate 15-20% of the Group’s revenue each in 2025. Both brands, which operate in Central and Eastern European countries, will also expand their product offer, while HalfPrice is to additionally develop its e-commerce platform. Another fashion brand, which in turn has a pan-European reach, is DeeZee, and the percentage share in Group revenues is expected to be 5% in 2025.
Interaction of the CCC Group brands
All the CCC Group’s brands operate under a similar model, based on common foundations. They focus on developing their own brands and offering an interesting selection of foreign brands. Products in their portfolio are available in full- and off-price channels, and the offers are always prepared with the customers’ needs in mind. Modern shops equipped with digital solutions and a holistic end-to-end view also play an important role in the operation of the signs. The Group also pays attention to new directions and diversification of deliveries, the development of e-commerce logistics and express deliveries. The integration of shop and warehouse inventory is also extremely important. Moreover, the CCC Group focuses on sustainable development, introducing ecological collections or reducing emissions of the scope 1-3.
The CCC Group wants the brands to build an increasingly strong position in their home markets while planning international development through the e-commerce channel. The development strategy will be financed from its own resources and credit capacity. As the CCC Group explains, improving operating results and optimizing working capital will involve the use of own funds and debt instruments, such as bank products or bonds, and all these financial channels will contribute to the implementation of development activities related to technology, logistics, as well as investing in the HalfPrice network.
According to PMR estimates, the year 2020 brought a year-on-year decline of -16.3% for the clothing and footwear retail sector in Poland, offset by growth in the online channel. However, online sales were still unable to compensate for the losses caused by reduced spending on fashion categories (which were declared by 55% of respondents to PMR’s survey conducted in August 2021) and mall closures.
More information in the PMR report “Clothing and footwear retail market in Poland 2021. Market analysis and development forecasts for 2021-2026″.
More information on e-commerce in that latest PMR report: “Online retail market in Poland 2021. E-commerce market analysis and development forecasts for 2021-2026”.