Salvatore Ferragamo feeling the pinch
Asia Pacific, particularly China, was best dressed for Italian luxury brand Salvatore Ferragamo as it foundered overall in negative territory for the nine months to the end of September.
Asia Pacific was its top market, with revenues growing by 2.8 per cent (3.5 per cent at constant exchange rates), despite softness in South Korea through significantly reduced tourism from China, and ongoing negative performance in Hong Kong.
Meanwhile, says its consolidated interim report, China recorded 8.1 per cent retail grown (15.5 per cent at constant exchange rates) for the period, while there was a 6.7 per cent (4 per cent) drop in the Japanese market.
Ferragamo says a strategic rationalisation of its wholesale channel saw revenues drop 0.8 per cent to €1 billion (US$1.1 billion), while overall retail revenue rose 1.2 per cent. The wholesale channel was also penalised by political tensions in South Korea and a strategic rationalisation in Japan.
Its gross operating profit (EBITDA) fell by 25.1 per cent to €162 million, and its net profit by 28.3 per cent to €79 million.
Footwear sales were down by 1.2 per cent, and handbags and leather accessories by 0.6 per cent, while fragrance sales were up 3.2 per cent.
At the end of September, the group’s retail network comprised 687 points of sales including 407 directly run stores and 280 third-party outlets in the wholesale and travel retail channel, as well as its presence in department stores and multi-brand specialty stores.
With a positive net financial position of €100 million compared to debt of €18 million at the same time last year, Ferragamo says the current year is a transition period for the group which will see the introduction of strategic initiatives.