MILAN — Despite the impact of the COVID-19 pandemic, Aeffe SpA reported a solid performance in 2021 in all of its geographic markets, in particular a jump in sales in the U.S., and in all of its distribution channels, including online.
In the 12 months ended Dec. 31, adjusted net profit at group level amounted to 2.6 million euros, after excluding nonrecurring tax benefits of 9.5 million euros, compared with an adjusted net loss of 16.3 million euros in 2020. Reported net profit totaled 12.1 million euros.
Consolidated revenues totaled 324.6 million euros, up 20.6 percent compared with 269.1 million euros in 2020. Revenues of the ready-to-wear division rose 11.5 percent to 220.2 million euros while sales of the footwear and leather goods division rose 30.2 percent to 139.9 million euros.
Aeffe is listed on the STAR segment of the Milan Bourse and comprises the Alberta Ferretti, Philosophy di Lorenzo Serafini, Moschino and Pollini brands.
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“Revenue growth in 2021 was significant, with a more than proportional increase in profitability,” said executive chairman Massimo Ferretti. “This reflects the good performance of all of our brands in the various markets and distribution channels, combined with the benefits of work to improve the structural efficiency of our business model. Notably, the fall-winter 2022-23 sales campaign was successful, helping to mitigate the effects of the health care emergency linked to the COVID-19 pandemic.”
Russia and Ukraine accounted for 2.6 percent of sales in 2021 and Ferretti said despite the uncertainties caused by the geopolitical tensions, the group remains “focused on the pursuit of medium/long-term initiatives: development of the strategic direction of Moschino, with the integrated management of all clothing licenses tied to the brand; direct management of distribution in mainland China, and significant strengthening of the online sales channel.”
Last year, the company took full control of Moschino, paying 66.6 million euros for the 30 percent stake in the brand it didn’t own. It also acquired the license to produce and distribute the Love Moschino collections of women’s apparel in-house for 3.6 million euros. Aeffe also took control of Moschino’s distribution in mainland China, signaling the increasing relevance of that market for the label. This involved around 20 stores, which have been operated for the past 10 years by Scienward Fashion and Luxury (Shanghai) Co. Ltd. In addition, Moschino, which is designed by Jeremy Scott, will open four franchised stores with a new partner. The company expects to have 30 directly operated stores and 22 franchised units in five years.
In 2021, group earnings before interest, taxes, depreciation and amortization totaled 35.3 million euros, or 10.9 percent on revenues, soaring from 4.5 million euros in 2020, an increase in profitability that was more than proportional to the growth in revenues. This was also helped by the corrective actions taken during the health emergency, with a further 6 percent reduction, or about 3.5 million euros, in fixed costs, including personnel, rentals and general expenses compared with 2020.
Operating profit amounted to 9.2 million euros, compared with an operating loss of 24.5 million euros in 2020.
While the company reported growth in all geographical areas and distribution channels, it saw a sharp acceleration in the U.S. and Greater China. Sales in Italy rose 15 percent to 132.1 million euros compared with 2020, boosted by the wholesale and direct online channels. Sales in Europe climbed 24.6 percent to 105.5 million euros, representing 32.5 percent of total turnover, mainly lifted by the progress made by the wholesale channel in Germany, Great Britain and Eastern Europe.
Retail continued to be partly affected by the reduced flow of tourists. In Asia and the Rest of the World, the group generated revenues of 65.4 million euros, representing 20.1 percent of the total, up 21.2 percent compared with 2020. The Greater China area led this growth with a 23 percent gain.
Sales in America rose 38.6 percent to 21.5 million euros, contributing to 6.7 percent of total turnover, boosted by a strong performance at wholesale, retail and online.
Wholesale revenues climbed 22.4 percent to 238.8 million euros, representing 73.6 percent of total sales.
Aeffe’s retail channel reported sales of 72.2 million euros, up 13.6 percent from 2020, and accounting for 22.2 percent of the total.
Royalties grew 30.1 percent to 13.6 million euros, accounting for 4.2 percent of the total.
Aeffe at the end of December had 57 directly operated stores and 143 franchised units.
Investments last year amounted to 2.3 million euros, mainly related to leasehold improvements and the purchase of software.
As part of the corporate rationalization and reorganization process, intended to enhance the operational efficiency and coordination of the group’s activities, the board resolved to consider the absorption of Velmar SpA, a wholly-owned subsidiary specialized in the production and distribution of underwear and beachwear. In 2020, Velmar signed a multiyear licensing agreement with Chiara Ferragni to expand her namesake brand in those two segments globally. A year earlier, Velmar had inked a licensing agreement for the production and distribution of Custo Barcelona collections. Velmar, located in Rimini, Italy was founded in 1983 and in 2001 passed under the control of Aeffe. The company also produces Moschino’s underwear and swimwear collections.