MILAN — Aeffe SpA said Thursday it hoped cost-cutting initiatives and a newly signed license agreement with French label Cacharel would lift the Italian fashion group in 2010, after net losses of $2.5 million in the third quarter.
This story first appeared in the November 13, 2009 issue of WWD. Subscribe Today.
For the three months through Sept. 30, Aeffe, which owns the Alberta Ferretti, Moschino and Pollini brands and produces collections for Jean Paul Gaultier, reported net losses of 1.7 million euros, or $2.5 million, from net profits of 6.8 million euros, or $10.2 million, in the same period last year. Consolidated revenues dropped 30 percent to 64.5 million euros, or $92.2 million, from 92.2 million euros, or $138.9 million.
Nine-month consolidated revenues declined 25.8 percent to 175.7 million euros, or $240.2 million, from 236.8 million euros, or $360.5 million, leading to net losses of 11.7 million euros, or $16 million, from net profits of 12.7 million euros, or $19.3 million, a year earlier.
Dollar figures were converted at average exchange rates for the periods to which they refer.
“[The] third-quarter 2009 results reflect the difficult times the luxury goods industry is living,” Aeffe executive chairman Massimo Ferretti stated. “Our group has faced the current economic situation taking actions to reduce operating costs and to rationalize the structure whilst safeguarding our know-how and with larger benefits expected in 2010. We therefore believe that today the group could face new development projects in the future with a more streamlined and efficient organization. To this end, I am very satisfied by the recently signed agreement with the well-known maison Cacharel, with which we are working on a broad project and for which I have high expectations.”
Aeffe signed a licensing deal with Cacharel last week to manufacture and distribute its women’s wear collection starting with fall-winter 2010.
Nine-month losses before interest, taxes, depreciation and amortization amounted to 5.9 million euros, or $8.1 million, from EBITDA of 36.3 million euros, or $49.6 million. At Sept. 30, net financial debt reached 94.2 million euros, or $141.3 million.
Aeffe did not break down revenues by brand, but Ferretti said the downturn had “particularly penalized our minor brands.” He added: “We are reassured by the fact that our core brands, albeit with negative trends, are performing better than the sector.”
Before interdivisional eliminations, nine-month revenues from ready-to-wear declined 23.6 percent to 143.7 million euros, or $192.1 million, while footwear and leather goods revenues decreased 33.6 percent to 41.2 million euros, or $56.3 million.
Nine-month revenues declined between 21 to 29 percent in all regions, except in Russia, where they fell 47.6 percent, to 11.6 million euros, or $65.1 million; in the U.S., where they dropped 31.9 percent to 13.8 million euros, or $18.9 million, and in Japan, where they contracted 6 percent to 13.2 million euros, or $18 million.
The company did not provide a full-year outlook.