MILAN — Prudence remains key for Tod’s chairman and chief executive officer Diego Della Valle.
Given the “uncertain and unforeseeable visibility in the next months,” Tod’s is opting for a strategy of “great prudence,” wrote Della Valle in his letter to shareholders on the occasion of the board’s meeting held on Wednesday approving the group’s 2019 financial statement.
“The goal will be to avoid injecting too much product on the market, to avoid having too much merchandise in stores, which would be difficult to dispose of, in case consumer spending restarts in a slower way than expected.”
Touting cost-saving measures and increased efficiency, while cautious, Tod’s must be “ready to immediately react as soon as the markets will show positive signs of a recovery.”
In the first part of the year, the group, which comprises the Tod’s, Hogan, Fay and Roger Vivier brands, was registering “excellent sales and a strong growth, confirming that the work done in the past years was beginning to produce the results we were hoping for.”
However, beginning in the second half of February, the coronavirus pandemic “caused the world to stop, everything changed and as a consequence, our objectives and priorities also changed as a group.”
As reported, Tod’s SpA reported a 1.7 percent decrease in net profits to 46.3 million euros last year, compared with earnings, net of minority interests, of 47.1 million euros in 2018.
In the 12 months ended Dec. 31, revenues totaled 916 million euros, down 2.6 percent compared with 940.5 million euros in the previous year.
In the first quarter ending March 31, Tod’s revenues plummeted by almost 30 percent to 152.8 million euros.
Commenting these figures last month, chief financial officer Emilio Macellari also spoke about prudence, pointing to a cut of 30 percent in capital expenditure, whose “impact will be significant but too early to quantify. We don’t know how and when we will return to the new normality. We are thinking of the second half and 2021, avoiding excessive product in stores, strengthening our image and the values of craftsmanship.”
Della Valle and his brother Andrea, vice chairman of the group, are waiving their remunerations for the year 2020, as reported, and the company will not distribute any dividends in light of the global coronavirus outbreak.
According to an online document on the Tod’s site, in 2019 Diego Della Valle’s salary amounted to around 1.8 million euros, while that of his brother totaled around 1.3 million euros. The Della Valle family is the main shareholder in the group, controlling a 71 percent stake.
The destination of 1 percent of consolidated net income, which corresponds to 456,588 euros, to pursue solidarity projects was confirmed.
Tod’s shares closed up 0.57 percent to 24.60 euros on Wednesday.
The group has appointed Deloitte & Touche SpA as audit firm for the 2021-29 period.