MILAN — Salvatore Ferragamo SpA reported a 2.3 percent uptick in its preliminary 2019 sales, lifted by the Europe, Middle East and Africa region and the retail channel in China, despite the protests in Hong Kong.
On Tuesday, the Florence-based company said revenues for the year ended Dec. 31 rose to 1.37 billion euros, compared with 1.34 billion euros in 2018. At constant exchange rates, revenues grew 1.3 percent.
In the fourth quarter, sales increased 2.1 percent, with retail revenues ahead 2 percent, and like-for-like up 0.2 percent.
All distribution channels helped the brand’s growth. In 2019, retail was up 2.4 percent. As of Dec. 31, the group’s retail network counted a total of 654 points of sales, including 393 directly operated stores and 261 third-party operated stores.
Like-for-like sales were up 1 percent, despite lower revenues in the secondary channel. Chief executive officer Micaela Le Divelec Lemmi told WWD this month that she has been “working on balancing full-price and off-price, first and secondary channels, in a way that enhances the brand.”
The wholesale channel showed a 3.1 percent increase in 2019, mainly thanks to the good performance of the travel retail channel. In the fourth quarter, wholesale revenues were up 2.6 percent at constant exchange rates.
The Asia-Pacific area was confirmed as the group’s main market in terms of revenues, increasing by 1.1 percent. In particular, in the full year, the retail channel in China recorded a solid revenue growth of 13.8 percent.
The political and social unrest in Hong Kong continued to significantly and negatively impact the area in the last quarter of 2019, where retail sales were down more than 50 percent compared with the fourth quarter of 2018. Asked about her views on Hong Kong, Le Divelec Lemmi said earlier this month it was “too soon to say,” adding that “some believe that it will never return to being what it was before” the protests.
“For us and for the entire luxury sector, Hong Kong is an important point of reference. We are working on an extremely tactical approach, keeping the potential of the market in mind,” she said. Responding to a question about retailing in the city, she conceded Ferragamo had been “in contact with landlords to review” the brand’s store contracts. “We are reflecting on this without taking decisions. It all depends on how it will evolve. Hong Kong has gone through particular dramatic moments in the past, too, and has always resurfaced. We have to look at the medium-long term approach tactically. Let’s see what the next months bring.” In light of this, the company plans to open stores in second- and third-tier cities, with a focus on mainland China.
Revenues in the Europe, Middle East and Africa region climbed 5.3 percent last year, accelerating in the last quarter when revenues were up 9.4 percent at constant exchange rates, mainly thanks to the double-digit performance of the retail channel.
North America inched up 0.7 percent, picking up in the last quarter, rising 2.2 percent at constant exchange rates.
The Japanese market registered a 0.5 percent decrease in revenues in the full year, hit hard by the consumption tax hike in the last quarter, when revenues fell 9.5 percent at constant exchange rates.
Revenues in the Central and South America in the full year were up 7.1 percent.
The footwear category was up 3 percent at constant exchange rates. Sales of shoes in the nine-month period last year increased 3.5 percent to 419.9 million euros, representing 42.3 percent of the total.
Handbags and leather accessories grew 2.8 percent. “We can and want to express our potential in handbags, and we have expanded and renewed our portfolio, completing our offer and speaking to different customers with different price ranges,” Le Divele Lemmi has said, citing the Studio Bag as a bestseller.
Last year, Paul Andrew was promoted creative director of the brand, while Guillaume Meilland maintained his role as men’s ready-to-wear design director.
Ferragamo returned to Milan with a men’s-only show on Jan. 12, following a few seasons of coed shows and a runway event held last June in Florence during Pitti Uomo. Today, Ferragamo’s men’s wear division accounts for around 40 or 45 percent of sales.
In 2019, sales of fragrances were down 7.9 percent compared with 2018.