MILAN — Aeffe SpA more than doubled its bottom line in the first nine months of the year, lifted by its proprietary brands. The Italian fashion group controls the Alberta Ferretti, Moschino, Philosophy di Lorenzo Serafini and Pollini labels and produces and distributes collections for Jeremy Scott and Cédric Charlier.
In the nine months ended Sept. 30, net profits climbed to 11.9 million euros from 4.9 million euros in the same period last year.
Revenues rose 9.9 percent to 235 million euros, compared with 213.8 million euros in the same period last year.
“We positively look forward in the light of the results of the first nine months of the year, both in terms of revenue growth and more than proportional increase of profitability, also thanks to a 15 percent increase of the spring 2018 orders’ backlog,” said executive chairman Massimo Ferretti. “These results are very encouraging and especially confirm the validity of our long-term strategy milestones aimed to strengthen the brands’ distinctiveness, with a strong focus on the quality of our collections and post-sales service and on market dynamics, with attention on e-commerce and retail development.”
Earnings before interest, taxes, depreciation and amortization rose 43 percent to 30.4 million euros, compared with 21.3 million euros.
As of Sept. 30, net debt totaled 66.1 million euros, compared with 77.6 million euros at the end of September last year.
Marcello Tassinari, general director of Aeffe, expressed his satisfaction with the performance of the company, which showed “an increasing appreciation for our brands, especially the proprietary ones.”
He said the investments and efficiency plans initiated over the past few years allowed the group to see growth in profitability “more than proportional compared with the sales growth, in the amount of 43 percent in the first nine months of the year.”
In the period, the retail channel grew 18 percent and the wholesale division was up 7.6 percent.The latter accounts for 70 percent of total revenues, allowing a “more streamlined management of costs and a positive impact on margins,” said Tassinari.
Italy saw a 20.2 percent increase in revenues to 116 million euros and Europe was up 5.2 percent to 48.8 million euros, led by tourist spending.
Greater China grew 16 percent.
The U.S., however, continued to show a weak performance, down 13.3 percent, dented by the slowdown in department stores. That channel did, however, show an improvement compared with the first half, when sales were down 14.6 percent. The market was also affected by a decrease in sales of licensed brands.
“To tackle this situation and directly stimulate the interest of the end consumer, we are focusing on the launch of capsule collections, mainly for the Alberta Ferretti and Moschino brands,” said Tassinari.
Also, the company has strengthened its online strategy, “creating a team with digital skills to this end with the goal to increase and enhance the customer experience, offering customers, for example, the possibility to pick up purchases in boutiques and personal shopping services that can be activated on our sites.”
The U.S. represents around 8 percent of total Aeffe sales, and the company is focused on developing its online business in the region.
In line with its retail strategy, the company continues to work on selecting its locations. It has recently opened a franchised Moschino boutique in Kiev and is planning to open around 10 new franchised units in Asia by the end of 2017 to strengthen its owned brands in the area. A directly operated Alberta Ferretti boutique will open by the end of 2017 in Shanghai.