MILAN — A solid wholesale business and a strong performance in all its markets, in particular the U.S. and Greater China, lifted profits and revenues at Aeffe SpA in the first half.
In the six months ended June 30, net profit climbed to 1.4 million euros, or $1.5 million, compared with 35,000 euros, or $41,000, in the same period last year.
Revenues rose 7 percent to 137.8 million euros, or $154.3 million, compared with 128.7 million euros, or $150.5 million. Sales of the ready-to-wear division gained 7.5 percent to 106.9 million euros, or $119.7 million, while the footwear and leather goods division decreased by 2.6 percent, totaling 44.8 million euros, or $50.1 million.
“We are very satisfied with the group’s positive performance, both in terms of revenues and profitability, as well as with the growth in all the key markets, especially given the continuing geopolitical uncertainty,” said executive chairman Massimo Ferretti. “The slowdown in tourism is currently impacting the retail channel, particularly in Europe, but is more than offset by the continued expansion in geographical areas, such as Greater China and the United States. The current global context presents many challenges that we are ready to face implementing strategies focused on the distinctiveness of our brands and on the market’s evolution.”
Asked about the decrease at the accessories division, Marcello Tassinari, managing director and chief financial officer, told WWD the decline was attributable to timing cutoff, as shipments take place at the end of June, when the first half fiscally closes. “Accessories did not suffer, and it will be one of the growth drivers in the short and long-term. In particular, Moschino accessories are performing very well,” Tassinari said.
Earnings before interest, taxes, depreciation and amortization climbed 25.2 percent to 12.2 million euros, or $13.6 million, driven by the ready-to-wear division.
In the first half, sales in Italy rose 6 percent to 60.5 million euros, or $67.7 million, representing 44 percent of the total. Sales in Europe, excluding Italy and Russia, rose 5.2 percent to 30.1 million euros, or $33.7 million, contributing 22 percent of the total. Russia, representing 3 percent of sales, rose 3.7 percent to 4.8 million euros, or $5.3 million, showing signs of a moderate recovery compared to last year.
Sales in the U.S. climbed 14.3 percent to 11.1 million euros, or $12.4 million, representing 8 percent of the total.
In the rest of the world, revenues gained 9 percent to 31.1 million euros, or $34.8 million, accounting for 23 percent of the total, lifted by a 27.7 percent growth in Greater China.
Tassinari explained that the growth in China and the U.S. stems from the “strategy of changes and investments” put in place in previous quarters. He cited the decision to show the Moschino men’s spring 2017 collection and the women’s 2017 resort line in Los Angeles last month, and the opening of two stores in the U.S. as a boost to retail, while also helping visibility at wholesale.
In China, Moschino has “a great appeal,” observed Tassinari. “With our exclusive partner, we plan to open 10 stores per year and expect further growth. There is a lot of potential for this brand in China.” He also underscored the relevance of traveling Chinese shoppers, ticking off the opening of four new duty-free shops in Korea in the first half, “thanks to the Chinese. China and its traveling residents have the potential to grant us a double-digit growth in the future.”
Earlier this month, Gabriele Maggio joined Moschino as its new general manager, as reported. He succeeds Corrado Masini, who had joined the company in September.
In the first half, wholesale revenues grew 14.7 percent to 99.2 million euros, or $111.1 million, contributing to 72 percent of sales.
Hurt by a decrease in tourist flows across Europe, sales at directly operated stores dropped 11.2 percent to 34 million euros, or $38 million, representing 25 percent of the total. Royalties rose 15.8 percent to 4.6 million euros, or $5.1 million.
Net debt stood at 76.3 million euros, or $85.4 million, compared with 80.5 million euros, or $89.3 million, or the end of last year.
Dollar figures were converted from the euro at average exchange rates for the periods they refer.