Tod's RTW Spring 2020

MILAN — Despite headwinds caused by the political turmoil in Hong Kong and sliding sales last year, chairman and chief executive officer Diego Della Valle touted an improvement in the last quarter of the year and his confidence in the path he has been charting for the Tod’s Group.

Preliminary 2019 revenues released on Thursday at the end of trading in Milan, where Tod’s SpA is publicly listed, showed a 2.6 percent decrease to 916.1 million euros, compared with 940.5 million euros the year before.

Sales in the fourth quarter grew 1.7 percent to 238.4 million euros, compared with the same period in 2018.

“The results of the last quarter showed an improvement in the revenue trend, despite the negative effects regarding the Hong Kong market,” Della Valle said. “We are starting to register the first positive signs of the strategy adopted at the time. We consider an absolute priority to protect the great quality of our products, the refined Italian lifestyle and, increasingly, the creative component, that attracts new consumers, who love to surround themselves with special things. The competition in the luxury sector is getting stronger, and therefore, we must be able at having always special and desirable products.”

Della Valle underscored how the new creative director of the Tod’s brand, Walter Chiapponi, who will coordinate the design team, will help emphasize these codes. Chiapponi joined the company in October after working for years at Bottega Veneta with the brand’s former creative director, Tomas Maier. As reported, after five years, Andrea Incontri left his role as men’s wear creative director of the brand at the end of June.

Della Valle has also been pushing a new strategy and business models of collaborations, introducing the No_Code project, which includes a trademarked “shoeker” — a mix between a shoe and a sneaker — and Tod’s Factory, in a reference to Andy Warhol, and eyeing a younger customer through capsule drops and limited editions. After Alessandro Dell’Acqua, Alber Elbaz designed a capsule of accessories under the Tod’s Factory moniker, launched last summer.

“For the time being, it is also essential to continue to invest heavily to be competitive and to support the brand awareness of our brands, especially in consideration of the increasing importance of the new markets, which require great attention,” continued Della Valle. “Our goal is to quickly create an omnichannel group model, which allows us to sell products through our direct distribution, the best e-tailers and our department store partners. The contribution of classic wholesale will be less and less important for us and we are prudently trying to decrease it. Even if this strategy will temporarily reduce the turnover, we believe it is the right thing to do, in order to be able to completely control the distribution policy of our group, worldwide. Excluding any repercussions, currently unpredictable, of the ongoing [coronavirus] epidemic, we believe that we can optimistically look at the current year, confident that the path followed is the right one.”

Last year, Tod’s sales totaled 461.8 million euros, down 7.4 percent, but the brand showed positive results in the retail channel. The company trumpeted a “healthy start” of the new T Timeless project, both for shoes and for leather goods.

Revenues of Roger Vivier grew 15.6 percent to 200.6 million euros, registering positive results in all its geographical areas and an “excellent feedback on new product families,” the company said.

Hogan was down 4.7 percent to 196.5 million euros, but it registered double-digit growth in Greater China, despite the issues affecting Hong Kong.

Fay revenues dropped 8.2 percent to 56.3 million euros, mainly due to the weakness of the Italian market.

Shoes continue to represent the group’s core business, totaling 730.8 million euros, down 1.7 percent, but showing a positive trend in the fourth quarter of the year.

Sales of leather goods and accessories totaled 121.7 million euros, a 5.4 percent decrease, but the company said the new lines of Tod’s handbags are registering a positive feedback.

Apparel showed a 6.7 percent decrease to 62.7 million euros, reflecting the performance of the Fay brand.

Sales in Italy decreased 7.6 percent to 260.7 million euros, showing an improvement in the last quarter of last year in both distribution channels.

In the rest of Europe, revenues were down 2.6 percent to 237.6 million euros, with a positive lift from the retail channel in the last quarter.

In the Americas, sales decreased 3.3 percent to 70.6 million euros, also showing a positive performance in the last quarter, with an improvement in both distribution channels.

Sales in Greater China increased 2.3 percent to 215.1 million euros. The positive results recorded in mainland China, which represents more than 60 percent of this region, were offset by the sharp slowdown in the Hong Kong market, caused by the political tensions.

In the Rest of the World area, sales were up 0.8 percent to 132.1 million euros.

By distribution channel, retail revenues rose 6.3 percent to 645.9 million euros, representing more than 70 percent of total revenues.

Like-for-like sales were down 4 percent in the year.

As of Dec. 31, the group’s network of stores comprised 290 directly operated stores and 115 franchised units, compared with 284 directly operated stores and 120 franchised stores at the end of December last year.

Revenues to third parties totaled 270.2 million euros, down 18.8 percent, attributed mainly to the weakness of the domestic and European markets.