MILAN — Led by the Tod’s and Roger Vivier brands, and lifted by gains in the U.S. and Asia revenues at Tod’s SpA rose 7.3 percent to 749.9 million euros, or $959.9 million, in the first nine months of the year — despite a drop in domestic sales also derived by a rationalization of its wholesale channel.
In the period ended Sept. 30, earnings before interest, taxes, depreciation and amortization at the group, which also comprises the Hogan and Fay labels, grew 3.7 percent to 199.5 million euros, or $255.3 million, with a 26.6 percent margin on sales.
Dollar amounts have been converted at average exchange rates for the periods to which they refer.
“Given the solid growth rate of [the] Tod’s brand and of our retail network, and the still tough economic situation in Italy, we deemed wise and prudent to adopt a very cautious approach in this market and to be even more selective with the wholesale distribution,” said chairman and chief executive officer Diego Della Valle. “We are receiving excellent results from our direct distribution network, which registered a further acceleration of the organic growth with the start of the fall-winter season. Therefore, I’m confident that our group will post a significant growth also this year.”
Also on Tuesday, the Tod’s board approved the development of an e-store to be managed by a new global Internet retailing company, Italiantouch Srl, focused on the sale of leading luxury brands and exclusive art works, interior design, cosmetics, jewelry, gourmet foods, hotels and travels. Italiantouch is controlled by Della Valle’s Diego Della Valle & C. Srl vehicle. The virtual store will initially operate in Italy and Europe and then be progressively expanded.
In a conference call, chief financial officer Emilio Macellari said this is a “small, start-up business that is devoting a good quantity of investments on our behalf to launch our brands. We will be the first in their portfolio, but not the only ones. We have saved money with other potential players, we have more favorable conditions compared with Yoox.com or Net-a-porter.com, for example, and we think this is the right solution.”
During the nine-month period, sales of the Tod’s brand rose 16.9 percent to 435 million euros, or $556.8 million. Hogan and Fay continued to be affected by the group’s strategy to rationalize the number of its wholesale clients. Hogan showed an 11.4 percent drop in sales to 202.5 million euros, or $259.2 million, although the company said the brand is growing in Asia.
Fay, mainly still a domestic business, posted a 17.3 percent drop to 61.4 million euros, or $78.6 million. Macellari said that the company has no intention to “move pricing and positioning” of Hogan and Fay because Tod’s and Roger Vivier “are covering the difficulties.” Roger Vivier more than doubled sales, to 50.2 million euros, or $64.2 million, from 23.5 million euros, or $32.9 million, in the same period last year.
Macellari offered a “preliminary indication” that “2013 can be a year similar to 2012 with the top line growing mid- to high-single digits, and profitability stable or slightly increasing.”
By category, footwear rose 9.8 percent to 555.2 million euros, or $710.6 million; leather goods and accessories were up 14 percent to 123.9 million euros, or $158.6 million, and apparel showed a 17 percent drop to 70.1 million euros, or $89.7 million, reflecting the performance of the Fay brand.
Italy posted a 13.9 percent drop in sales to 319.9 million euros, or $409.5 million, stemming from a rationalization of Italian wholesale distribution, said the firm. In Italy, the company closed 130 out of 800 doors, said Macellari. “The reduction of orders from the reduction of wholesale is expected to be recovered in the fourth quarter. Part of the goods can be sold in our own stores, which are showing a very good acceleration of business,” he said.
Europe was up 8.3 percent, mainly driven by double-digit growth in the U.K. and France; the U.S. was up 33 percent to 58.3 million euros, or $74.6 million, and Asia and rest of the world rose 54.7 percent growth to 215.5 million euros, or $275.8 million, accounting for 29 percent of sales. This was led by Greater China, which represents about 18 percent of total sales.
The board approved the extension of the eyewear license with Marcolin SpA until Dec. 31, 2018, an agreement which was meant to expire at the end of December 2014. The license for Hogan will be replaced by a deal whereby Marcolin will guarantee the supply of eyewear to be exclusively distributed in stores selling Hogan products.
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