MILAN — Salvatore Ferragamo SpA said net profits rose 2 percent to 27 million euros, or $37 million, in the first three months of the year, driven by growth in all main markets and in leather accessories and footwear.
Profits also were boosted by a 1 million euro, or $1.37 million, minority interest.
Sales in the quarter ended March 31 gained 6 percent to 299 million euros, or $409.6 million, compared with 282 million euros, or $372.2 million, in the same period last year.
Operating profit rose 7 percent to 42 million euros, or $57.5 million.
Dollar amounts are converted at average exchange for the periods to which they refer.
The Asia-Pacific region was once again the group’s main market, increasing 5.3 percent in the period and accounting for 36.4 percent of total sales. There was a significant contribution from the retail channel in China, which recorded more than 10 percent growth. “Mainland China continues its double-digit gains and is over-performing at retail,” said chief executive officer Michele Norsa during a conference call with analysts.
Europe, despite the geopolitical tensions which negatively impacted global tourist flows, was up 9.2 percent.
“Europe was penalized at the end of the quarter by the strong euro currency and the deterioration of the Ukraine and Russian crisis,” said Norsa. Russians accounted for 15 to 20 percent of sales in most European cities, he said, and “if there is a decrease it will probably impact a few percentage points in specific cities,” with London faring “better than Italy or the French Riviera.”
The performance in North America was dented by the harsh winter weather and inched up 1.2 percent.
“The U.S. market is expected to be strong in the rest of the year. We maintain positive expectations for the rest of the year,” said Norsa.
“The U.S. comparison is challenging with last year but we expect a nice performance, a solid high-single-digit growth given a double-digit growth in April and May,” echoed chief financial officer Ernesto Greco.
Japan was up 8.7 percent, but would have risen 18.1 percent at constant exchange. “Japan continues to be a two-speed market, with a very strong March, up 30 percent, ahead of the planned tax increase, with April reacting the opposite way, slowing down double-digits and May close to normal with things easing in the next weeks,” noted Norsa.
Addressing the currency headwinds, Greco said the company had “balanced with hedging,” but that it expects “to increase prices with the summer collection in Japan, a 4 percent increase, and with the next collection. We slowly absorb the negative forex.”
Revenues in Central and South America gained 9.3 percent but would have grown 18.7 percent at constant exchange. “Mexico is a driving force and Brazil is improving close to the sport event [FIFA World Cup], and is another contributor in the region,” said Norsa.
The company said that the business trends seen in the first quarter “justify expectations for growth also throughout 2014, in the absence of severely unfavorable market conditions.”
At the end of March, the group had 356 directly operated stores. Revenues at the retail distribution channel in the first quarter were up 3.9 percent, while the wholesale channel gained 9.3 percent.
Handbags and leather accessories gained 15.3 percent and footwear was up 4.6 percent, together accounting for 77 percent of the total. “Leather products are the star, including bags, one of the winning categories for the year,” said Norsa. He also pointed to men’s shoes, which he defined as “very strong.”
Apparel was down 9.6 percent and fragrances dropped 2.2 percent. The decrease in the latter was “justified by a strong comp basis and shipping problems in East Europe and China, bureaucratic problems that were solved in April,” said the executive, adding that he expected “very solid single-digit growth from this quarter; we are optimistic about fragrances.”
He added that “the exceptional trend of the euro hopefully will be limited in coming months.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast