Inside the Moschino store.

MILAN — Aeffe SpA was dented by the performance of its wholesale channel in the first six months of the year and on Tuesday shares of the Italian fashion company took a tumble following the release of the results. By early afternoon, shares had fallen 6.24 percent to 1.77 euros and closed down 8.89 to 1.72 euros.

In the first half ended June 30, net profits fell 37.3 percent to 5.2 million euros compared with 8.3 million euros in the same period last year. The company reported earnings net of IFRS 16, a new accounting standard whereby all leasing contracts must be recognized in the balance sheet as assets and liabilities.

Revenues rose 1.3 percent to 173.3 million euros, compared with 171.1 million euros in the same period last year.

Revenues of the ready-to-wear division inched up 0.4 percent to 132.2 million euros, while sales of the footwear and leather goods division climbed 4.4 percent to 60.7 million euros, mainly led by the Moschino brand.

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.

“Encouraged by the good performance of our monobrand stores, the results approved today are influenced by the slowdown in the wholesale channel recorded in the second quarter, penalized by an uncertain macroeconomic situation with consequent impact on margins,” said executive chairman Massimo Ferretti. “In this global and highly challenging market environment, the group is committed to the design and development of increasingly desirable collections that are able to offer usage opportunities in line with the current demand, supported also by strengthened R&D, production and marketing divisions.”

In the first half, sales in Italy were down 1.3 percent to 80.1 million euros, dented by the weakness of the wholesale channel, in contrast with the positive performance of the retail division. The Italian market accounted for 46.2 percent of total sales. That share decreased to 34 percent net of the effect of sales to foreign customers in Italy.

Revenues in Europe were down 6.4 percent to 38.6 million euros, accounting for 22.3 percent of the total, also hurt by a slowdown of the wholesale channel.

In Asia and in the Rest of the World, sales amounted to 45.5 million euros, climbing 14.9 percent and representing 26.3 percent of the total. The performance was driven mainly a good trend in Greater China, which posted 9.7 percent growth.

Sales in America edged down 0.2 percent to 8.9 million euros, contributing to 5.2 percent of the total, entirely due to the performance of the wholesale channel. At constant exchange rates, sales in the region were down 5.5 percent.

Net of IFRS, earnings before interest, taxes, depreciation and amortization totaled 18.3 million euros, down 12.8 percent compared with 21 million euros in the first half last year. Operating profit was down 15.8 percent to 12.2 million euros.

By distribution channel, wholesale revenues declined by 2.4 percent to 121 million euros, contributing to 69.8 percent of the total, dented by the 4 percent decrease of the fall 2019 collection.

On the other hand, sales at directly operated stores rose 9.5 percent to 46.1 million euros, accounting for 26.6 percent of the total. The number of directly operated stores remained unchanged, totaling 64, of which 44 were in Europe, two in America and 18 in Asia. Franchised stores were strategically repositioned and a number were closed, especially in Asia, so that franchised doors totaled 178 compared with 184 at the end of June last year.

Royalties increased 23.2 percent to 6.2 million euros.

On May 18, designer Alberta Ferretti, the sister of Massimo, held a show in Monaco to present her namesake 2020 resort collection as guest of honor of the Monte-Carlo Fashion Week, which ran from May 15 to 19.

Moschino’s creative director Jeremy Scott, meanwhile, showcased that brand’s men’s spring 2020 collection, along with the horror-themed women’s resort spring 2020 lineup, on June 7 at the Universal Studios Hollywood Backlot.

In March, Moschino and Scott, who is based in Los Angeles, revealed a capsule collection in collaboration with The Sims with a party at Coachella.

As reported, Moschino last week opened a 1,000-square-foot, long-term pop-up shop at 635 Madison Avenue on the northeast corner of 59th Street. The new outpost complements the brand’s existing location at 73 Wooster Street in SoHo.

As of June 30, Aeffe’s net debt stood at 36.6 million euros, compared with 40.9 million euros at the end of June last year,  improved by a better operating cash flow. Operating net working capital amounted to 85.7 million euros, compared with 77.1 million euros at the end of June last year.