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MILAN — Expansion in the Americas and China, and narrowing wholesale channels in Italy, paid off for the Tod’s Group in the second quarter, buoying results for the first half and reinforcing performance expectations for the rest of the year.
This story first appeared in the August 8, 2013 issue of WWD. Subscribe Today.
The luxury Italian shoe and leather goods group, which is listed on the Milan Stock Exchange, reported sales growth of 8.4 percent for the April to June period, lifting results for the first half to 491.2 million euros, or $653.6 million, up 1.8 percent over the second quarter of 2012.
All dollar figures are calculated at average exchange for the period to which they refer.
Second-quarter sales growth contrasted to a 3.7 percent decline in the first three months of the year, when the company reported it was restructuring its distribution mix, rationalizing wholesale channels, mainly in economically troubled Italy, to maintain exclusive positioning and credit portfolio quality. The group focused on growth in retail channels and international markets, particularly in Greater China and the Americas.
Operating profitability (earnings before interest, taxes, depreciation and amortization) soared 15.9 percent in the second quarter of 2013 compared to the same period in 2012.
“In line with management expectations, our group’s sales and profits registered a sound growth in the second quarter of the year,” commented chairman and chief executive officer Diego Della Valle.
Sales in directly owned stores rose 14.3 percent in the first half to 312.6 million euros, or $416 million, and accounted for 63.4 percent of the group’s turnover in the first six months.
Sales in Greater China, including Hong Kong and Macau, climbed 35.2 percent in the first half to 127.5 million euros, or $169.6 million, reaching 26 percent of sales for the group.
Sales in North and South America increased 19.7 percent in the first half to 38.1 million euros, or $50.7 million.
The distribution remix added to the squeeze on turnover in Italy, already clobbered by the country’s longest recession since World War II. The group’s first-half sales in Italy were 161.1 million euros, or $214.4 million — a 19 percent drop from the same period in 2012 — and amounted to just one-third of the group’s total sales.
The Italy-centric Fay clothing and Hogan shoe brands were deeply affected, with first-half sales falling 26.3 percent and 14.8 percent, respectively. The flagship brand Tod’s grew 3.5 percent in the first half to 296.3 million euros, or $394.3 million.
Roger Vivier — once the group’s smallest player — skyrocketed 80.6 percent in the first six months to 59 million euros or $78.5 million, delivering more than double the turnover of Fay, whose first-half sales amounted to 23.9 million euros, or $31.8 million.
The group noted that Hogan’s first-half sales slip of 14.8 percent to 111.3 million euros, or $148.1 million, was entirely due to the Italian market, as the shoe brand performed well elsewhere.
The group’s core shoe business consolidated strength, with first-half sales climbing 6.3 percent to 383.3 million euros, or $510 million, while apparel sales sank 27.2 percent to 27.9 million euros, or $37.1 million. Leather goods sales in the first half stood at 79.3 million euros, or $105.5 million, down 4.6 percent compared to the same period in 2012.
Tod’s Group’s EBITDA for the first half tallied 129.5 million euros, or $172.3 million, up 4.6 percent over January to June 2012. Net income was also positive in the first half, edging up 1.8 percent to 75.7 million euros, or $100.7 million.
Tod’s Group’s net financial position was 118.2 million euros, or $157.2 million.
“I’m confident that also the second half of the year will achieve good results and I can confirm our expectations to post a further growth of revenues and profits also this year,” concluded Della Valle.