MILAN — Furla’s growth slowed in 2018, primarily as a result of consolidation and investments in production and its online platform.
In 2018, the Italian accessories company registered sales of 513 million euros, up 2.8 percent compared with 499 million euros in 2017. At constant exchange rates, sales rose 5.2 percent. Furla has doubled its sales in the past four years.
“It was a year of harmonization,” president Giovanna Furlanetto said in an interview at the company’s showroom and offices here. “We bought back our business in China and in Australia and invested in technology and production.”
“We are very satisfied with the results last year,” added chief executive officer Alberto Camerlengo, although he noted currency fluctuations cost the company 12 million euros. The executive said Furla in 2018 took control of its retail distribution in China, Hong Kong and Macau from Fung Group. The joint venture with the parent of Li & Fung Ltd. was first inked in 2013. Furla also bought back its business in Singapore.
The Asia-Pacific region represented 26 percent of total revenues and grew 18.2 percent at constant exchange rates. The company did not provide growth at current exchange rates.
Sales in the U.S. rose 13.2 percent, accounting for 8 percent of the total. Japan was confirmed as Furla’s largest single market, accounting for 22 percent of total sales and growing by 3.6 percent. The company is developing a capsule of handbags using kimono fabrics with Hosoo, a Japanese producer of said materials. The products will be in stores starting in September. Collections that are aimed at one specific market are working, Camerlengo said.
Furlanetto said the capsule will be important in a “very relevant market for us and will not only liven up our points of sale but also the Japanese will appreciate the homage to their culture.”
In 2018, the Europe, Middle East and Africa area represented 44 percent of total sales and its performance was in line with the previous year. Camerlengo conceded that the uncertain geopolitical situation in Europe affected Furla’s customers. “Luckily, we are small and we can respond quickly. There is limited bureaucracy within the company and Mrs. Furlanetto is always in the company, her door is always open.”
The company has also been investing in its organization. Last year, Furla revealed the acquisition of Effeuno Srl, a longtime partner company specialized in manufacturing leather goods. Based in Tavarnelle Val di Pesa, a 40-minute drive from Florence, the 53,820-square-foot plant already exclusively produced Furla’s accessories, employing 120 workers. The takeover is part of the brand’s strategy to invest in Italy and to strengthen the group’s supply chain.
In 2018, more than 4.6 million pieces were produced under the Furla moniker. “We’ve created synergies, as we acquired an industrial culture, and Effeuno a distribution culture,” Camerlengo said.
The group strengthened its control of distribution, with its own stores representing 70 percent of sales last year. The company is present in 98 countries, counting 490 monobrand stores, of which 285 are directly controlled, 163 franchised and 42 are travel retail units.
E-commerce sales grew 45.7 percent last year. Year-to-date, online sales were up 55 percent. “Europe is the main market for this channel, followed by Japan, the U.S. and Asia,” Camerlengo said. Furla directly controls its online platform but also works with third-party partners. The online channel accounts for between 7 and 8 percent of sales. “We’ve changed four different platforms, we’ve learned from those trials and errors and now it’s one of the channels that works the best,” Furlanetto said.
Furlanetto underscored that the projects set in motion are all long-term developments, “not for immediate results and without discounts.” That led to a question about the future of the company.
“Furla is not for sale,” Furlanetto said firmly. “Yes, the company is a possible target, but there is another generation coming up, and we are investing in the company in the long term.” In 2019, the company is marking 92 years in business. A possible initial public offer has also been shelved.
The company is also developing complimentary categories. Case in point: In February, during Milan Fashion Week, Furla launched its first sneakers collection, with an event targeting its final customers at the city’s main store near the Duomo cathedral and supported by an intense marketing campaign.
“The sneakers were immediately available for purchase and we reached out to a new customer, who was drawn to a young and fresh product,” said Camerlengo, revealing that those models already accounted for 8 percent of sales at the store. The sneakers are being rolled out in other stores this month.