By  on March 13, 2012

MILAN — Tod’s SpA said Tuesday that net profits rose 23.8 percent to 135 million euros, or $187.6 million at average exchange, in the year ended Dec. 31.

Strong gains in Asia and robust growth of the Tod’s brand helped the Italian luxury goods firm report a 13.5 percent rise in sales to 893.6 million euros, or $1.24 billion. The Tod’s label grew 19.8 percent in 2011, reaching revenues of 487.5 million euros, or $677.6 million.

In a separate statement released late Tuesday afternoon, the group said that “following the rumors of an alleged termination of the collaboration between Tod’s and Derek Lam, the company confirms that the agreement between the parties is set to terminate on [Sept. 30, 2012].”

RELATED STORY: Derek Lam Said Separating From Tod’s >>


It said that “in the meantime, Tod’s is in the process of evaluating its options, considering that, based on the company’s future development plans, the role of the creative director of Tod’s will be central and even more important. The choice will therefore be directed toward an individual with great creative talent and able to commit the necessary amount of time to the success of the brand.”

A Milan-based luxury analyst downplayed the change in creative director as “inconsequential. The choice of a known designer is perhaps relevant only at the very beginning.”

Commenting on the outlook for 2012, Diego Della Valle, chairman and chief executive officer, said that, despite the economy, he was “confident that the strength of our brands and the excellent appeal of our products will enable our group to post a significant growth of sales and profits also this year.”

Affected by soft consumer spending in Italy and by its selective distribution, the Hogan brand showed a 4.7 percent increase in revenues to 280.9 million euros, or $390.4 million, last year. The company is pushing Hogan’s expansion internationally, especially in Asia, where it opened its first three stores in China in September.

Also hurt by the weak Italian market, Fay sales dropped 2 percent to 87.8 million euros, or $122 million.

Roger Vivier revenues climbed 67.9 percent to 36.5 million euros, or $50.7 million. In a conference call with analysts, chief financial officer Emilio Macellari said a Vivier store will open in the U.S. in the first half of the year.

Sales of footwear, the group’s core business, rose 14.5 percent to 646.5 million euros, or $898.6 million, followed by leather goods and accessories, which gained 17.6 percent to 144.9 million euros, or $201.4 million. Apparel grew 2.6 percent to 101.6 million euros, or $141.2 million.

All markets posted double-digit growth except for Italy, where sales were up 5.5 percent. “Brilliant results” in Germany, the U.K. and France helped boost revenues in the rest of Europe, which rose 11.2 percent to 182 million euros, or $253 million.

Sales in the U.S. gained 17 percent to 62.4 million euros, or $86.7 million.

Macellari said the group started to sell online on its Web site on Monday. “It’s open to the U.S. market, a test for at least one, maybe two seasons in the U.S. to practice ability with logistics and payments, and [will] go to Europe by the end of the year or in 2013.”

Brick-and-mortar sales in Asia and the rest of world grew 38.1 percent to 199.9 million euros, or $277.8 million, driven by “very strong results” in Mainland China and Hong Kong.

The company had 176 directly operated stores and 70 franchised units at the end of December. Most of the openings last year were in Asia, mainly in Mainland China and in Hong Kong, where the group currently operates 40 directly operated stores.

Macellari said Tod’s in 2012 is “considering” opening 15 to 20 stores, mostly in China; “ a couple in Brazil,” a new market for Tod’s; one in Japan, and two in Korea. These venues will comprise “mostly” Tod’s stores, then Hogan banners and three Roger Vivier units.

In 2011, the group invested a total of 61.9 million euros, or $86 million, including about 20 million euros, or $27.8 million, aimed at the restoration of Rome’s Colosseum.

In 2012, capital expenditures will total between 50 and 60 million euros, or $69.5 million and $83.4 million, including investments in the expansion of Tod’s headquarters and production facilities, said Macellari.

As of Dec. 31, the group had a positive net financial position equal to 110.7 million euros, or $153.8 million, compared with 96.5 million euros, or $134.1 million, at the end of 2010.

Shares closed up 7.17 percent to 84.45 euros, or $110.70 at current exchange.

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