MILAN — Driven by gains in Greater China and the Americas, but dented by a cutback in wholesale distribution in Italy, Tod’s SpA said operating profits for the nine months to Sept. 30 fell 0.7 percent to 168 million euros, or $220 million, on a 0.4 percent increase in sales to 752.6 million euros, or $986 million.
Earnings before interest, taxes, depreciation and amortization totaled 199.5 million euros, or $261.3 million, with a 26.5 percent margin on sales, and were flat compared to the same period the previous year.
The Italian luxury group does not provide a net profit figure for the period. Dollar amounts are converted at average exchange for the periods to which they refer.
“In line with our plans, we achieved outstanding results abroad, mainly on the Asian and U.S. markets,” said Diego Della Valle, chairman and chief executive officer. “The group’s strategy — to pursue an international expansion while rationalizing the Italian wholesale distribution — is producing the expected results, despite the markets’ volatility.”
The group comprises the Tod’s, Hogan, Fay and Roger Vivier brands. In the first nine months, the Tod’s brand remained the group’s core label with sales of 448.6 million euros, or $587.6 million, up 3.1 percent. Hogan sales decreased 13.7 percent to 174.7 million euros, or $228.8 million, a drop entirely attributed to the Italian market, where the brand is heavily exposed. Hogan, however, showed double-digit growth rates in Europe and Asia.
Fay sales dipped 26.3 percent to 45.3 million euros, or $59.3 million, penalized by higher exposure to the domestic market and to the wholesale channel.
Roger Vivier sales climbed 65.7 percent to 83.2 million euros, or $109 million.
Footwear contributed the lion’s share of sales, totaling 580.1 million euros, or $760 million, up 4.5 percent.
Revenues of leather goods and accessories totaled 120.6 million euros, or $158 million, down 2.7 percent. Sales of apparel dropped 27 percent to 51.1 million euros, or $67 million, reflecting the performance of the Fay brand. Responding to an analyst who asked if the company saw Fay as a nonstrategic brand, chief financial officer Emilio Macellari responded in the negative. “We significantly cleaned up its distribution and positioned it at the highest level in its market segment. From Italy we can only expect a contribution in organic growth and it’s not likely to produce it in the short term,” argued Macellari. “For the second phase, we can consider an internationalization.”
Macellari praised the two designers tapped to revamp the brand, Tommaso Aquilano and Roberto Rimondi, for “establishing its visibility and credibility,” and providing “freshness to the collections and additional appeal. Fay is not nonstrategic but less core, for sure. Our real heritage is shoes and leather, but it is strategic as the other three brands and can represent an opportunity to expand internationally and as Italy recovers.”
In the period, sales in Italy totaled 260.8 million euros, or $341.6 million, down 18.5 percent. In the rest of Europe, revenues totaled 163.4 million euros, or $214 million, up 4.6 percent, mainly driven by positive results in France and the U.K.
The Americas rose 13.6 percent to 66.2 million euros, or $86.7 million, driven by both directly operated stores and the wholesale channel.
Greater China continued to deliver “excellent results,” growing 27.9 percent, despite a slowdown in Mainland China. Revenues in the area totaled 180.8 million euros, or $236.8 million, accounting for 24 percent of the total. “Mainland China is positive for us, although it showed a slowdown in the pace of growth, but this is much less true for Hong Kong, Taiwan and Macau,” said Macellari.
The Rest of the World segment was up 9.8 percent to 81.4 million euros, or $106.6 million.
Sales through directly operated stores rose 10.5 percent to 457.5 million euros, or $599.3 million. As of Sept. 30, the group counted 208 directly operated stores and 82 franchised units, compared with 192 and 74 at the end of September last year.
“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
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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