MILAN — Distribution channels and key geographic markets — Greater China in particular — helped drive Aeffe SpA to a 79 percent jump in net profits in the first half to 8.3 million euros, compared with 4.6 million euros in the same period last year.
Revenues rose 14.1 percent to 171.1 million euros, compared with 150 million euros in the first half last year. Sales of the ready-to-wear division rose 13.2 percent to 131.7 million euros. Revenues of the footwear and leather goods division increased 15.4 percent to 58.1 million euros.
“We assess very positively the results of the first half and we are satisfied with the continuous growing trend of our proprietary brands, especially in a macroeconomic context characterized by volatility and high competitiveness,” said Massimo Ferretti, executive chairman of Aeffe. “The long-term development and investment strategy reconfirms to be effective whilst sustainable, both in terms of an increase in sales and out-of-proportion growth in profitability. We are therefore optimistic for 2018 and, in light of the orders backlog of the pre-collections of the spring/summer 2019 season, we are confident also for the next year.”
In the first half, earnings before interest, taxes, depreciation and amortization climbed 35 percent to 21 million euros, mainly driven by sales growth of both divisions.
Operating profit rose 39 percent to 14.5 million euros.
Marcello Tassinari, managing director of Aeffe, told WWD he was “very satisfied” with the performance in the period and “optimistic” for the rest of the year. “In an uncertain scenario, the strategic development plan implemented by the group over the last few years featuring significant investments in creativity and quality of our brands’ collections and commitment to operational efficiency has proved to be farsighted to seize the challenges of global markets and rewarding both in terms of an increase in sales growth as well as out of proportion growth in profitability,” he added.
In the first half, sales in Italy, which accounted for 47 percent of the total, were up 12.7 percent to 81.2 million euros.
Revenues in Europe, representing 21 percent of the total, increased 13.1 percent to 36.1 million euros, driven especially by good performance in the U.K., Germany, France and Eastern Europe.
The Russian market, representing 3 percent of consolidated sales, increased by 13.9 percent, showing a good recovery compared to the last year.
Sales in the United States, contributing to 5 percent of consolidated sales, decreased 7.5 percent to 9 million euros. At constant exchange rates, they rose 1.6 percent.
In the Rest of the World, sales rose 25 percent to 39.6 million euros, amounting to 23 percent of the total, especially lifted by a strong performance of Greater China, which posted a 41 percent growth.
By distribution channel, wholesale revenues grew 17.7 percent to 123.8 million euros, contributing to 72 percent of the total.
The sales at directly operated stores rose 5.4 percent to 42.1 million euros, contributing to 25 percent of the total.
Royalty incomes increased by 7.2 percent to 5 million euros, representing 3 percent of the total.
As of June 30, net debt stood at 40.9 million euros, compared with 67.1 million euros at the end of June last year.