Moschino Men's Fall 2018

MILAN Aeffe SpA continued to grow in 2017, lifted by a solid performance of its apparel and accessories divisions, growth in Europe and Greater China, and despite difficulties in the U.S. The Italian fashion group reported an 11.4 percent gain in preliminary sales to 312.6 million euros in the 12 months ended Dec. 31, compared with 280.7 million euros in 2016.

Aeffe, which is listed on the Star segment of the Italian market, controls the Alberta Ferretti brand; Philosophy di Lorenzo Serafini; Moschino, designed by Jeremy Scott, and Pollini, and produces and distributes collections for Cédric Charlier and Jeremy Scott.

“The trend of 2017 reflects the strategy of constant attention to quality and to enhancement of our brands’ international positioning,” said executive chairman Massimo Ferretti. “Therefore we are very satisfied with the results achieved in terms of revenues, with double-digit growth of all the group’s proprietary brands.” Ferretti said that, in light of a 15 percent gain in the group’s sales campaign for the spring season and the positive trend for the fall pre-collections, “we look to the future with renewed optimism.”

In 2017, revenues of ready-to-wear rose 11.1 percent to 239.8 million euros. Sales of the footwear and leather goods division increased by 12.8 percent to 108.2 million euros. “The growth is in line with our expectations and the plans we had mapped out back in 2007,”  managing director and chief financial officer Marcello Tassinari told WWD.

Sales in Italy grew 20.7 percent to 152.1 million euros, accounting for 48.7 percent of total revenues, due to organic growth in wholesale and in the retail channel, which each benefited from local customers and high-end tourist flows.

Europe was up 13.1 percent to 67.7 million euros, representing 21.7 percent of total, driven especially by the good performance in the U.K., Germany and France and at both the group’s directly operated stores and at wholesale.

Russia was flat at 9.1 million euros, representing 2.9 percent of the total, but showing “good signs of recovery in the last quarter of the year. The trend is positive, something is moving,” said Tassinari. He noted that the presence of Russians in Europe has increased in the last six months and that “step by step, one can assume things will return to how they were before the crisis of the ruble.”

Sales in the U.S. decreased 18.9 percent to 18.6 million euros, or 6 percent of total, mainly due to the slowdown in sales in the department stores. “We are working on bypassing this deep crisis of department stores through e-commerce, with capsules for Moschino and Alberta Ferretti,” explained Tassinari. “They help to stimulate business targeting a younger customer compared with the more traditional distribution channels. It’s much easier now to communicate through social media and e-commerce. The goal is to increase our online sales in the U.S.”

He said the online channel now represents 7 percent of global sales. “It’s growing, data is positive,” he added.

Revenues in the rest of the world grew 3.8 percent to 65 million euros, amounting to 20.8 percent of the total, driven in particular by 16.5 percent growth in Greater China. Tassinari emphasized the importance of this region and the extensive presence of Moschino, with more than 50 franchised stores in China. He underscored the brand’s awareness in China and “excellent sellout” in the area, as well as future prospects. The Alberta Ferretti label is also growing in China and the company is investing in new directly operated stores, such as the first such unit in Shanghai that opened in November.

By distribution channel, in 2017, wholesale revenues grew 8.9 percent to 219.1 million euros, accounting for 70.1 percent of consolidated sales. Revenues at directly operated stores climbed 18.4 percent to 83.3 million euros, representing 26.7 percent of the total.

Royalties grew 11.4 percent to 10.1 million euros, or 3.2 percent of total.

Aeffe is “making adjustments” to prices, in light of the stronger euro and targeting the U.S. market, working to “maintain the collection in line with the positioning. We’d prefer for the strong euro effect to be over, but we are not afraid,” Tassinari said.

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