MILAN — Growth at Salvatore Ferragamo SpA slowed down in 2016, dented by lower tourist flows, although business showed an acceleration in the last quarter.
In the 12 months ended Dec. 31, sales edged up 1 percent to 1.44 billion euros, or $1.58 billion. At constant exchange, sales were down 2 percent. In the last quarter, revenues gained 4 percent.
In 2016, by category, footwear was up 1.7 percent to 611.1 million euros, or $672.1 million, accounting for 42.5 percent of total revenue. Handbags and leather accessories were flat, with sales of 529 million euros, or $582 million, representing 36.8 percent of the total. The performance was posted against a hard comparison base, as the division was up 12 percent in 2015. Ready-to-wear inched up 0.6 percent to 93.5 million euros, or $102.8 million, accounting for 6.5 percent of total sales. Fragrances gained 0.5 percent to 88 million euros, or $96.8 million. In the last quarter, this category was up 11 percent. Silk and other accessories were down 2.2 percent to 93.2 million euros, or $102.5 million.
2016 saw several changes for the Florence-based company with former Furla chief executive officer Eraldo Poletto succeeding Michele Norsa in August. Former creative director Massimiliano Giornetti exited the firm in March and was succeeded by a trio of designers: Fulvio Rigoni, women’s ready-to-wear design director; Guillaume Meilland, men’s ready-to-wear design director, and Paul Andrew design director of women’s footwear.
By geography, the Asia-Pacific area was confirmed as the group’s main market, representing 36.3 percent of total revenue. The region was up 1.1 percent to 521.7 million euros, or $573.8 million. In the last quarter, sales in the region were up more than 4 percent, despite hard comparisons — up 8 percent in the same period in 2015. The positive performance was achieved despite ongoing weakness in Hong Kong, which remained negative. In particular, in the last quarter, the retail channel was down 13 percent at constant exchange rates (while it was down 21 percent in the nine months last year). The retail channel in China was up 6 percent at constant exchange in the full year, with an acceleration in the last quarter (up 13 percent at constant exchange rates compared with a 3 percent growth in the nine months of 2016).
For the year, sales in Europe decreased 4.3 percent to 364.3 million euros, or $400.7 million, accounting for 25.3 percent of total sales, hurt by lower tourist flows as a consequence of the terrorist attacks. In the last quarter, the decrease was 2 percent.
North America was up 4.3 percent to 348.2 million euros, or $383 million. The gain took place despite a strong currency, which also negatively impacted tourist flows in the U.S. In the last quarter, revenues grew 7 percent thanks to the performance of the retail business, which was up 10 percent.
The Japanese market edged down 0.5 percent to 126.7 million euros, or $139.3 million. In the last quarter, sales were up 3 percent, following an 18 percent gain in the last quarter of 2015.
Revenues in Central and South America climbed 6.1 percent in the full year to 76.8 million euros, or $84.4 million, with an acceleration in the last quarter (up 12 percent). At constant exchange, the growth was even more significant, showing a 16 percent gain in the full year and a 23 percent growth in the last quarter.
As of Dec. 31, the group’s network totaled 683 points of sale, and 402 directly operated stores, while the wholesale and travel retail channel included 281 Third Party Operated Stores (TPOS), as well as the presence in department stores and high-level, multibrand specialty stores. The retail division was up 2.3 percent to 912.3 million euros, or $1 billion, accounting for 63.5 percent of total.
The wholesale channel was down 2.1 percent to 502.6 million euros, or $552.8 million, mainly penalized by the negative performance of the U.S. market. However, the last quarter showed a positive trend with a 3 percent gain.