Moschino Pre-Fall 2020

MILAN — China and the Asia Pacific region helped boost the performance of both Aeffe SpA and Safilo Group, which reported gains in preliminary 2019 sales on Wednesday.

Accessories lifted revenues of the Italian fashion group Aeffe, while both proprietary and licensed brands contributed to a solid performance of the eyewear specialist Safilo, which is in the midst of a restructuring.

In the 12 months ended Dec. 30, Aeffe sales totaled 351.4 million euros, up 1.4 percent, compared with 346.6 million euros in the previous year.

Revenues of the ready-to-wear division totaled 262.2 million euros, down 1.3 percent.

Sales of the footwear and leather goods division increased 8.3 percent to 128.2 million euros.

“We positively evaluate the 2019 revenues trend, considering the macroeconomic uncertainty and the rationalization actions implemented to the Chinese multibrand network to gain efficiency,” said executive chairman Massimo Ferretti. “The good performance of retail and online channels, along with the progression at international level and in the accessories segment, reflect the effectiveness of the investments made to further strengthen the strategic positioning of our brands.”

Aeffe, which is listed on Italy’s Star segment of the Italian Bourse, includes the Alberta Ferretti, Philosophy di Lorenzo Serafini, Moschino and Pollini brands and produces and distributes the Jeremy Scott and Cédric Charlier labels.

Sales in Italy decreased 4.5 percent to 160.9 million euros. Business in the region was dented by the weakness of the wholesale channel, offset by a positive performance of retail. The Italian market accounted for 45.8 percent of sales, but that decreased to 36 percent net of the effect of sales to tourists visiting Italy.

Revenues in Europe climbed 8.2 percent to 80.3 million euros, contributing to 24.7 percent of sales, driven especially by a strong performance in the U.K., Germany and Eastern Europe.

In Asia and the Rest of the World, sales rose 7.4 percent to 86 million euros, representing 24.5 percent of the total, boosted by a good trend in China and Korea, which posted a 7.2 percent and 14.6 percent growth, respectively.

Revenues in America edged down 0.5 percent to 17.6 million euros, contributing to 5 percent of sales. At constant exchange rates, sales decreased 4.5 percent.

The wholesale channel showed a 1.6 percent decline to 244 million euros, representing 69.4 percent of the total. The company attributed the decrease mainly to the downturn registered by the fall 2019 sales campaign.

Retail sales grew 7.7 percent to 93.8 million euros, representing 26.7 percent of revenues. Royalties were up 17.7 percent to 13.7 million euros, accounting for 3.9 percent of sales.

Safilo reported preliminary 2019 sales that excluded the group’s discontinued retail operations. Revenues were up 3.1 percent to 939 million euros, compared with 910.7 million euros in the previous year.

The wholesale  business, which excludes the production agreement with Kering, reported within the geographical area of Europe, was up 5.2 percent, confirming the expectation outlined last December. Safilo will continue to produce 1.8 million pieces per year for Kering until 2023, as reported.

Sales in Europe inched down 0.7 percent to 448.8 million euros, representing 47.8 percent of total revenues.

Sales in North America grew 4.6 percent to 334 million euros, accounting for 35.6 percent of total.

Revenues in Asia Pacific climbed 23.1 percent to 78 million euros, accounting for 8.3 percent of total.

Sales in the rest of the world grew 2.7 percent to 78.3 million euros.

The wholesale performance was boosted by a solid performance of its own proprietary brands Carrera, Polaroid and Smith, overall growing by 5.7 percent at constant exchange rates, and by the positive performance of the main licensed brands, which range from Tommy Hilfiger and Kate Spade to Givenchy and Fendi.



Carrera sunglasses by Safilo.  Courtesy

In December Safilo presented its 2020-24 business plan, which included laying off 700 employees and a revision of its sales and margins forecasts. The business plan included the exit of the Dior brand from Jan. 1, 2021, and that of the Fendi label from July 1 that same year. LVMH Moët Hennessy Louis Vuitton in 2017 signed a joint venture with Marcolin, called Thélios, for the production and distribution of eyewear collections. Safilo is working on a more stable balance of labels, resizing the luxury division and investing in its own proprietary brands. Licenses such as Levi’s, Under Armour and with David Beckham, are changing Safilo’s portfolio. The DB Eyewear by David Beckham line was unveiled earlier this month in Milan and will hit stores in February.

Safilo’s sales in the last quarter of the year totaled 230.4 million euros, down 2.8 percent mainly due to the expected decline in Europe of the business related to the supply agreement with Kering, which was communicated last October.

In addition, on a preliminary basis and before the accounting code IFRS 16, Safilo confirmed adjusted earnings before interest, taxes, depreciation and amortization margin at 5.5 percent and a net debt of around 30 million euros.


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