Le Coq Sportif, the French kit supplier, is facing multiple challenges that could impact its revenue and profitability. The recent elimination of the French national rugby team in the quarter-finals of the Rugby World Cup has dampened the enthusiasm for the brand's official jersey sales. Le Coq Sportif had high expectations of selling 250,000 units during the competition, but with France's early exit, it is unlikely to reach its targets.
Financially, Le Coq Sportif has been struggling. In the first half of the year, the company's revenue dropped to €63 million, mainly due to a slump in its footwear business and a decrease in exports to Spain. Operating losses have also increased, reaching nearly €6 million in the first half of 2023. The brand's profitability has been a concern for several years, with significant net losses reported since 2019.
The challenges faced by Le Coq Sportif have been further exacerbated by its bid to become the official outfitter of the French athletes at the Paris Olympics. While this was intended to provide international visibility, it has put a strain on the brand's financial resources. The company has sought equity capital and state-backed loans to fund its initiatives, but the need for repayment by 2026 adds to the financial pressure.
Despite these difficulties, Le Coq Sportif remains committed to overcoming the challenges. The company has reached a conciliation agreement with its partner banks under the supervision of the French inter-ministerial committee for industrial restructuring. It acknowledges the rise in manufacturing costs and inflationary tensions but expresses gratitude for the support of the state, banking partners, shareholders, employees, suppliers, and customers.
Looking ahead, Le Coq Sportif aims to outfit the French athletes at the upcoming Olympic and Paralympic Games. It recognizes the exceptional opportunity for visibility and commercial success but also acknowledges the competition from global players. The success of the Olympic endeavor is crucial for the brand's future.
In conclusion, Le Coq Sportif faces significant challenges, including the disappointment of the Rugby World Cup and ongoing financial struggles. However, the company remains determined to overcome these obstacles and capitalize on the opportunity presented by the Paris Olympics. With the support of various stakeholders, Le Coq Sportif aims to secure its position in the sports apparel market and achieve long-term success.
