MILAN — Aeffe SpA logged another profitable quarter, which showed growth in all its main markets. In the three months ended March 31, net profit rose 26.7 percent to 5.7 million euros, or $6.2 million, compared with 4.5 million euros, or $5 million, in the same period last year.
Revenues rose 7 percent to 76.2 million euros, or $83.8 million, compared with 71.2 million euros, or $79.7 million.
The ready-to-wear division rose 7.4 percent to 59.3 million euros, or $65.2 million, while revenues of the footwear and leather goods division decreased by 4.2 percent to 23.5 million euros, or $25.8 million.
“The good results recorded in the first quarter of 2016 confirm the appreciation of our offer and the effectiveness of investments realized last year to enhance our brands, confirmed also by a 6 percent increase in the backlog of orders for the next fall-winter collections,” said executive chairman Massimo Ferretti. In particular, the executive highlighted the performance in Europe, the U.S. and Greater China. “In the coming months we aim to intensify our presence in high potential markets such as the Far East and Middle East,” he said.
In the period, sales in Italy were up 3.5 percent to 33.1 million euros, or $36.4 million, accounting for 43.4 percent of total sales. Revenues in Europe excluding Russia gained 8.3 percent to 17.8 million euros, or $19.5 million, contributing to 23.4 percent of total revenues. The Russian market is showing signs of recovery compared with 2015, declining 2.8 percent to 2.3 million euros, or $2.5 million, and representing 3.1 percent of the total.
Sales in the U.S. climbed 29.5 percent to 6.7 million euros, or $7.3 million, contributing to 8.8 percent of the total. “The American market has shown appreciation for the change in design direction at Moschino, as well as at Alberta Ferretti and Philosophy,” Marcello Tassinari, managing director and chief financial officer, told WWD. Two Moschino boutiques opened in the U.S. last year, in Los Angeles and New York, he pointed out, highlighting that the brand will show the men’s collection with the women’s resort in Los Angeles on June 10, as reported. He added that Jeremy Scott has agreed to mount a retrospective of his fashions at the Dallas Contemporary museum in 2017.
In the Rest of the World area, revenues rose 6.7 percent to 16.2 million euros, or $17.8 million, amounting to 21 percent of the total, lifted in particular by Greater China, which grew 24 percent. “BNP Paribas research has shown that Moschino is an extremely hot brand in China,” observed Tassinari, noting the company has been opening five to 10 franchised stores on a yearly basis there. “We have an ambitious, but feasible development plan. [The area] is giving us great satisfaction, but we still see growth potential. We know it’s been more difficult for some of our competitors, but we were not as present as others.” He said Hong Kong is also growing.
Slower tourist flows in main European cities dented the group’s retail performance, which saw a 10.4 percent decrease to 18.2 million euros, or $20 million. Aeffe counts 63 directly operated stores and 186 franchised units.
Aeffe’s wholesale division, which accounts for 73 percent of total sales, grew 15.1 percent to 55.6 million euros, or $61.1 million.
Royalties decreased 8.3 percent to 2.2 million euros, or $2.4 million, from 2.4 million euros, or $2.6 million. “We are focused on improving the licenses as the collections improve,” explained Tassinari. “The decrease was connected to the slowdown of the Love Moschino ready-to-wear, but we are seeing a turnaround in line with that of the collection.” The brand is licensed to Sinv. Tassinari also highlighted a development of fragrances, pointing to the launch of Fresh Moschino in November 2015 with longtime licensee Euroitalia. “Its rollout has been a great success,” he said. “There is an aggressive development plan.”
Asked about the performance of accessories brand Pollini, Tassinari said the first quarter was “influenced by the brand’s strong presence in Russia.” The company is now focused on shifting business to other countries, including Eastern Europe. “With the fall 2016 collection, we are seeing a 3 percent gain at Pollini,” he said.
Dollar figures are converted from the euro at average exchange rates for the periods in question.