MILAN — Aeffe SpA executive chairman Massimo Ferretti issued a rallying cry to the fashion industry Thursday, despite seeing his own group’s earnings cut in half in 2008.
This story first appeared in the March 13, 2009 issue of WWD. Subscribe Today.
“A crisis doesn’t always have to be seen as a negative,” Ferretti said. “This is the time when companies need to focus strongly on their core business, on streamlining costs and on improving efficiency. Aeffe is facing the current situation with this attitude.”
He added: “The entire Aeffe management team is focused on the group’s main brands, in particular Alberta Ferretti and Moschino, in order to keep product innovation as strong as ever and to continue to create highly desirable collections, all this supported by a distinctive communication strategy. Clearly, at the same time, the group is focusing further on cost rationalization in all its divisions.”
For the 12 months through Dec. 31, net profits at the Italian fashion group, which also owns the Pollini brand and produces collections for Jean Paul Gaultier, among others, fell 49.9 percent to 7.7 million euros, or $11.3 million. Stripping out noncash extraordinary costs related to asset impairment in 2008 and one-off deferred tax and liabilities in 2007, earnings fell 25.2 percent.
Revenues edged up 0.5 percent to 294.7 million euros, or $433.6 million, due largely to gains in emerging markets. At constant exchange and excluding the effects of the sale of a stake in the Narciso Rodriguez brand to Liz Claiborne Inc. in May 2007, sales gained 3.2 percent. The company did not break out fourth-quarter figures.
Dollar figures are converted at average exchange rates for the periods to which they refer.
As of Dec. 31, net financial debt reached 66.8 million euros, or $94.2 million, climbing from 38.5 million euros, or $56.7 million, a year earlier. The group ascribed the hike to investments, share buybacks and an increase in net working capital.
Sales at Alberta Ferretti and Moschino, which together account for more than two-thirds of the group’s turnover, increased 3.5 and 4.4 percent, respectively. However, business was down at all other brands, falling 2.6 percent at Pollini, 5.5 percent at Jean Paul Gaultier and 23.8 percent at Blugirl, Authier, Narciso Rodriguez and Basso + Brooke combined.
Aeffe released the figures an hour before the close of the Milan Bourse, where its stock fell 0.9 percent to 0.44 euros, or 56 cents.