MILAN — Dented by a sluggish wholesale channel, currency fluctuations and a decrease in its core footwear category, Salvatore Ferragamo SpA registered a 3.4 percent drop in preliminary 2018 revenues to 1.34 billion euros, compared with 1.39 billion euros in the previous year. At constant exchange rates, sales decreased 1.7 percent. Bright spots were the group’s performance in China, its handbags division, its retail channel and an inversion of trend at retail in the last quarter last year.
In the three months ended Dec. 31, sales were down 3.6 percent, dented by negative currency trends, a lower incidence of promotional sales and a slow wholesale business. At constant exchange rates, sales were down 1.8 percent.
As of Dec. 31, the group’s retail network comprised a total of 672 points of sales, including 409 directly operated stores and 263 third party-operated stores.
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In the year, retail sales dropped 3 percent to 877.9 million euros, representing 65.2 percent of total.
Like-for-like sales were down 1.4 percent, picking up in the last quarter, when they were down 1.2 percent.
The wholesale channel was penalized during the year by the destocking activity and a strategic rationalization, showing a 3.8 percent decrease to 447.5 million euros, representing 33.2 percent of total.
The Asia Pacific area was confirmed as the group’s main market in terms of revenues, decreasing by 1 percent to 505.5 million euros, accounting for 37.5 percent of total. At constant exchange rates, sales in the region were up 0.8 percent. Greater China showed a positive performance, partially penalized by the negative performance in South East Asia. In particular, in the last quarter last year, the retail channel in China grew 7.6 percent. At constant exchange rates, it was up 10.1 percent.
The Europe, Middle East and Africa region registered a 6.1 percent decrease to 329.7 million euros, accounting for 24.5 percent of total and mainly hurt by the negative wholesale business in the last part of the year due to the delayed deliveries following the change of a commercial partner in the Middle East.
Sales in North America decreased 5.4 percent to 315.6 million euros, representing 23.4 percent of total. At constant exchange, sales dropped 2.4 percent. The performance was mainly impacted by the negative trend of department stores.
The Japanese market registered a 0.4 percent decrease to 119 million euros, accounting for 8.8 percent of the total. Retail stores showed a positive performance but the region was negatively impacted by the strategic rationalization of the wholesale channel.
Revenues in Central and South America were down 2.3 percent to 76.6 million euros. At constant exchange rates, they rose 3.8 percent, boosted by the retail network.
Shoes, the group’s main category, decreased 5.9 percent to 554.6 million euros, representing 41.2 percent of the total.
Handbags and leather goods showed improvements, gaining 1 percent to 521.3 million euros, accounting for 38.7 percent of total. At constant exchange rates, the division was up 2.6 percent.
Ready-to-wear decreased 14.9 percent to 76.4 million euros, accounting for 5.7 percent of total.
In February, during Milan Fashion Week, Ferragamo will hold a coed runway show to unveil its men’s and women’s fall 2019 collections, designed by Guillaume Meilland and Paul Andrew, respectively. Sources say that the company is planning a change of location after years showing at the Bourse, where the company is publicly listed.
Silk and other accessories decreased 8.6 percent to 78.9 million euros, accounting for 5.9 percent of total.
Fragrances grew 5.6 percent to 94.1 million euros, representing 7 percent of total. The company over the year launched the new women’s scent Amo Ferragamo and several flankers for its bestseller Signorina.
In December, the company appointed Alessandro Corsi as its new chief financial officer, effective Jan. 11, succeeding Ugo Giorcelli.
Preliminary sales were revealed on Tuesday at the end of trading in Milan. Ferragamo shares have decreased 25.2 percent in one year, as the company goes through a phase of reorganization under chief executive officer Micaela Le Divelec Lemmi.
Full financial figures for 2018 will be reported on March 12.