MILAN — Growth in all geographical markets and a spike in sales of footwear, handbags, leather accessories and fragrances helped drive Salvatore Ferragamo SpA’s net profit up 10.2 percent in the first quarter to 17 million euros, or $22.2 million, compared with 15.5 million euros, or $21.7 million, in the same period last year.
This story first appeared in the May 15, 2012 issue of WWD. Subscribe Today.
Profits in the first quarter of 2012 include 5 million euros, or $6.5 million, of minority interest.
In the period ended March 31, revenues rose 23.4 percent to 259.6 million euros, or $340 million, compared with 210.4 million euros, or $294.5 million, last year.
Dollar amounts have been converted at average exchange rates for the periods to which they refer.
The Asia-Pacific region continued to be the group’s top market in terms of revenues, with sales growing 27.3 percent to 96.4 million euros, or $126.2 million. The company attributed the gain partially to the performance of its retail chain that in China recorded an increase of more than 36 percent.
Despite Europe’s sluggish economy, the Italian luxury firm saw a 27.8 percent increase in revenues in the region, which, the company said, confirms “the extraordinary brand awareness of Ferragamo and its ability to attract the interest of the global tourist flows.”
Sales in the U.S. grew 17.6 percent despite the temporary closure during the quarter of the brand’s New York Fifth Avenue flagship in New York, which is the number-one store for the group in terms of turnover. The venue was renovated and reopened at the beginning of April.
The Japanese market remained “roughly stable” in terms of revenues, with a 0.3 percent decrease at constant exchange rates, but a surge of 9.9 percent due to the favorable contribution of the exchange rate. Revenues in Central and South America also showed “excellent results,” gaining 37.1 percent in the period.
Retail sales gained 16.9 percent to 160.2 million euros, or $209.8 million, despite the renovation and closure of several key locations such as New York, London, Monaco, Seoul and Cannes, France.
At the end of March, the group had 325 directly operated stores (up from 323 at the end of 2011), while the wholesale and travel retail channel comprised 265 third-party operated stores (from 270 at the end of 2011), as well as presences in department stores and high-level multibrand specialty stores. The group’s monobrand network therefore included a total of 590 doors compared with 593 at the end of 2011.
The wholesale and travel retail channel grew 36.8 percent to 95.5 million euros, or $125.1 million.
In terms of product, sales of footwear rose 26.2 percent, while handbags and leather accessories gained 24.3 percent. The two categories represent around 74 percent of the group’s total sales. Fragrances grew 35.7 percent, thanks to the successful launch of the women’s scent Signorina.
Capital expenditures totaled 8.5 million euros, or $11.1 million, from 5.1 million euros, or $7.1 million, last year, up 67.7 percent, mainly driven by new stores and the enlargement and refurbishment of existing key locations, as well as logistics enhancements and digital projects.
Ferragamo shares on Monday closed down 1.04 percent at 17.10 euros, or $22.08 at current exchange.