MILAN — A difficult economy, a slump in sales in the U.S. and Japan, the poor performance of its Pollini division and costs associated with the opening of stores hurt Aeffe SpA’s first-half results, as the Italian fashion group reported a net loss of 10 million euros, or $13.3 million. This compares with a profit of 6 million euros, or $9.1 million, in the same period the year before.
Revenues dropped 23 percent to 111.1 million euros, or $147.7 million, compared with 144.6 million euros, or $221.2 million,in the first six months of 2008. Sales would have dropped 23.9 percent at constant exchange rates and excluding the effect of the Narciso Rodriguez license. Aeffe, which operates the Alberta Ferretti, Moschino and Pollini brands and produces collections for Jean Paul Gaultier, sold its stake in the Narciso Rodriguez brand to Liz Claiborne Inc. in May 2007. Claiborne subsequently sold the holding.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Executive chairman Massimo Ferretti underscored how the first-half results were affected “not only by the general economic environment, but also by the negative performance of the Pollini division and, albeit to a lesser extent, by the costs associated with the expansion of our monobrand stores network.” In the first six months, one directly owned boutique and four franchised stores opened in Europe, and four franchised units bowed in Asia. The company now has a total of 226 stores.
However, Ferretti said he was “reassured with the fact that our core business continues to be profitable despite the general decline in consumption.” In order to better weather the recession, Aeffe has been restructuring the company since early this year, cutting costs at the Pollini division “to recover production efficiency, and focusing on collections more in line with the new clients’ needs,” said Ferretti. In May 2008, designers Jonathan Saunders and Nicholas Kirkwood joined Pollini as creative directors ofthe ready-to-wear and accessories categories, respectively, replacing Rifat Ozbek.
Sales at the apparel division dropped 22.6 percent to 90.2 million euros, or $119.9 million, while footwear and leather goods dipped 25.8 percent to 27.6 million euros, or $36.7 million. Aeffe said it has been working on reducing operating costs for its leather goods division.
Regionally, all markets suffered. Net debt stood at 88.9 million euros, or $118.2 million, compared with 50.6 million euros, or $77.4 million, at the end of June 2008.
Aeffe shares closed down 0.83 percent to 0.53 euros, or 74 cents at current exchange, on the STAR segment of the Italian Bourse.
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