MILAN — Tod’s SpA is in the midst of an overhaul of its business model and, as expected, preliminary 2018 sales reported on Wednesday have yet to show a turnaround. In the 12 months ended Dec. 31, revenues fell 2.4 percent to 940.4 million euros, compared with 963.3 million euros in 2017. At constant exchange rates, sales were down 0.5 percent.

The results were dented by the group’s wholesale channel, a lackluster performance of its core footwear category, a drop in its leather goods division, and currency fluctuations.

Diego Della Valle, chairman and chief executive officer of the group, which comprises the Tod’s, Hogan, Fay and Roger Vivier brands, said the figures were “substantially in line” with expectations, “despite the growing international economic and political uncertainties.”

The strategy and the business model adopted with the Tod’s Factory project are starting to take shape and every month is becoming increasingly important and visible; the first products and the projects are starting to give good results and we are also satisfied with the team of people we have chosen to carry out this project and the future development of the company,” continued Della Valle, referring to the new business model that will see regular drops of products and capsules throughout the year. “For this reason, in order to sustain a rapid growth, we decided to allocate all the necessary resources, considering that these highly competitive and dynamic markets require significant investments for growth. I think this is a particularly innovative moment in our sector, very competitive, with new formulas and new business models, but at the same time it’s full of brand new opportunities, that we want to be ready to seize, with an appropriate strategy, with special products and with a solid organizational structure.”

Della Valle is standing by the company and made a reference to the family’s mandate to “an international bank to proceed with the purchase of a significant stake; we believe, in fact, that in the medium-term we will be able to get excellent financial satisfactions.”

As reported in December, one of Della Valle’s holdings submitted a regulatory filing that pointed to plans to increase its stake in Tod’s by up to 5 percent, or 1.7 million shares.

According to the filing, the holding has signed a contract with Crédit Agricole Corporate and Investment Bank, under which it agreed to buy up to 1.7 million Tod’s shares through an accelerated shares purchase.

Della Valle and his family own around 60 percent of the Italian shoes and leather goods company.

In 2018, the Tod’s and Roger Vivier brands were the most affected by currencies’ fluctuations, due to their higher presence abroad.

Tod’s sales totaled 498.6 million euros in 2018, down 3.3 percent compared with the previous year. Good results were achieved in the Americas and in Asia, while Europe was affected by lower purchases by tourists and political and economic uncertainties in Italy.

Hogan revenues were 206.1 million euros, up 1.1 percent from 2017. Italy’s weakness was offset by a solid double-digit growth outside national borders.

Despite a 3.2 percent decrease in sales to 173.5 million euros, the company said that Roger Vivier revenues improved with the arrival in stores of the new products designed by Gherardo Felloni, which are “getting excellent feedback.” The performance in Asia was “good” while the brand suffered in Europe, especially in terms of sales to tourists.

Finally, sales of Fay were down 3.5 percent to 61.3 million euros, hurt by the weakness of the domestic market.

Sales of shoes were down 1.9 percent to 743.6 million euros and the leather goods and accessories category saw a 5.3 percent drop in revenues to 128.6 million euros.

Sales of apparel were 67.3 million euros, down 2 percent, broadly reflecting the trend registered by the Fay brand.

By geography, sales in Italy were down 5.4 percent to 282.2 million euros, affected by the persistent weakness experienced by this market.

In the rest of Europe, the group’s revenues totaled 244 million euros, down 0.5 percent.

A weak performance of the wholesale channel impacted the Americas despite a positive retail division boosted by local spending. In the market, sales amounted to 73 million euros down 6.5 percent. At constant exchange, sales decreased 1.4 percent.

Revenues in Greater China totaled 210.1 million euros, inching down 0.9 percent. At constant exchange they were up 3.1 percent from 2017 showing an acceleration of the performance in the fourth quarter. Positive results were seen in Mainland China, which represents approximately 60 percent of this region, in Hong Kong and in Macau.

Finally, in the area “Rest of the World” the group’s revenues were 131.1 million euros, edging up 0.9 percent. At constant exchange they were up 3.1 percent.

In 2018, retail sales totaled 607.7 million euros, down 2.2 percent. At constant exchange, they were in line with the figure of 2017, and represented approximately two thirds of the group’s turnover.

Like-for-like sales were down 3 percent, impacted by the worsening of sales in Italy and the rest of Europe, and despite the improvement registered in Greater China.

As of Dec. 31, the group comprised 284 directly operated stores and 120 franchised units, compared to 275 DOS and 112 franchised stores at the end of December 2017.

Revenues to third parties totaled 332.7 million euros, down 2.8 percent from the previous year, due to the weakness of this channel in relevant markets, such as Italy and the U.S.

Full 2018 figures will be released on March 11.