A strong sales performance in Greater China and strength in its e-commerce channel and Roger Vivier brand continued to boost Tod’s revenues in the first half of 2021.
The Italian luxury group on Wednesday reported narrower net losses of 20.7 million euros for the first six months of the year, compared with a loss of 80.6 million euros in the same period last year.
Revenues rose 55.1 percent to 398.4 million euros, compared with 256.9 million euros in the first half of 2020, lifted by a rebound in retail sales worldwide and all of its brands. The first-half 2021 sales figure was still 10.9 percent below pre-COVID-19 levels.
“The second quarter of the year confirmed an acceleration of the group’s performance. I believe that the increase in volumes and the quality of revenues, together with the careful control of overhead costs, will allow us to achieve a gradual improvement in margins,” chairman and chief executive officer Diego Della Valle said in a statement.
In the second quarter, sales totaled 219 million euros, up 110.4 percent, compared with 104.1 million euros in the same period last year. In the first half of the year, adjusted earnings before interest, taxes, depreciation and amortization rose to 65 million euros compared with an operating loss of 18.7 million euros in the same period of 2020. Adjusted earnings before interest and taxes were negative at 2.7 million euros, compared to an operating loss of 94.1 million euros reported in the first half of 2020. Tod’s first-half 2020 EBITDA and EBIT were impacted by an extraordinary inventory writedown of 30 million euros. During a conference call, chief financial officer Emilio Macellari addressed analysts’ questions about whether Tod’s was on track to meet consensus targets of 785 million euros in revenues and a 21 million euro EBIT loss for the full year.
“I would be really surprised if we weren’t able to reach 800 million euros in turnover this year. I think that the EBIT target is achievable, reasonable,” Macellari noted.
Sales of the Tod’s brand rose 50.9 percent to 188 million euros. Roger Vivier revenues surged 83.6 percent to 112.7 million euros. Sales of Hogan increased 38 percent to 80.5 million euros and those of Fay by 35 percent to 16.8 million euros.
On the call, chief executive officer Umberto Macchi di Cellere explained that brands like Hogan and Fay are smaller in size but continue to be “important,” especially in their key markets like China and Italy. “There is a good potential for growth in the future.”
The Tod’s brand, he explained, has a “good distribution network and doesn’t need to increase its size. There are still opportunities to be cashed” for the Roger Vivier brand.
“The focus is, without any doubt, on growing. In China and Asia the opportunities are more focused on Roger Vivier, if the strategy is viable and profitable from an economic point of view,” Macchi di Cellere continued.
By category, sales of shoes rose by 54.5 percent to 327.1 million euros, and those of leather goods and accessories were lifted 65.9 percent to 49.8 million euros. Revenues generated from apparel amounted to 21.1 million euros, up 41.4 percent.
By geographic market, Italy was up 35.5 percent to 88.8 million euros. Sales in Europe totaled 74.9 million euros, up 22.1 percent. Revenues in the Americas were up 58.2 percent to 25.4 million euros. Sales in Greater China rocketed 110.2 percent to 156.2 million euros, while the Rest of the World rose 33.8 percent to 53.1 million euros.
“New infections and new store closures in Japan, Korea and other Asian countries caused a slowdown in the rest of the world category,” Macellari added.
Retail sales totaled 292 million euros, up 57.7 percent, as sales to third parties amounted to 106.4 million euros, up 48.2 percent.
As of June 30, the group’s distribution network included 304 directly operated stores and 96 franchised stores, compared to 292 directly operated stores and 112 franchised units at the end of June last year.
Tod’s has been rejuvenating its offer, reaching out to Gen Z, most recently appointing digital entrepreneur Chiara Ferragni as a board member, focusing on digitalization and working on streamlining its wholesale distribution.
Macellari emphasized that Ferragni’s involvement in the company is mainly based on her potential to communicate with a younger demographic rather than commercial deals linked to Ferrari’s own brand.
“We now have onboard someone who is credible and has achieved an important penetration into a portion of the market of younger customers. It is not a secret that we are targeting younger customers,” Macellari said.