MILAN — Tod’s SpA posted growth in profits and revenues in the first quarter, boosted by improved sales in Italy, the U.S. and Asia and a spike in the core footwear division.
This story first appeared in the May 14, 2010 issue of WWD. Subscribe Today.
In the period ended March 31, earnings before interest, taxes, depreciation and amortization (EBITDA) grew 9.1 percent to 48.7 million euros, or $67.2 million, while sales rose 3.4 percent to 208.1 million euros, or $287.1 million. Tod’s does not provide a net profit figure for the first quarter.
Chairman and chief executive officer Diego Della Valle said the group continues to “achieve outstanding results: sound sales growth, huge improvement of profitability, cash generation, tight control of inventories.”
By label, the Tod’s brand saw sales rise 4.2 percent to 101.6 million euros, or $140.2 million, accounting for almost half of total revenues. Hogan sales gained 7.7 percent to 80.2 million euros, or $110.6 million. Apparel brand Fay posted a 13.4 percent drop in sales to 21.9 million euros, or $30.2 million. Roger Vivier’s sales rose 7.9 percent to 4.2 million euros, or $5.8 million. “In the next few seasons, the brand will remain focused on consolidating its exclusivity and prestige,” the company said.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Footwear continues to be the group’s core business. Sales of shoes advanced 7.6 percent to 155.7 million euros, or $214.8 million. Leather goods and accessories sales fell 9.9 percent to 28.5 million euros, or $39.3 million, “mainly due to the lower average price of some new iconic products,” said the company, adding, however, that “the entire collection of Tod’s handbags enjoyed strong success, with growth in volumes sold.”
Apparel sales dropped 4.2 percent to 23.7 million euros, or $32.7 million, but the Hogan apparel collection showed “positive signals,” said the company. Della Valle is growing Hogan’s two-year old apparel business, which, until last season, was designed by Thakoon Panichgul but is now in the hands of a design team. In March, the company unveiled a tie-up with Karl Lagerfeld, who will design a one-off capsule collection for Hogan that will be in stores in November.
Sales in Italy rose 4.4 percent to 121.6 million euros, or $167.8 million, while revenues in the rest of Europe dipped 5.5 percent, totaling 44 million euros, or $60.7 million. Sales in the U.S. climbed 5.5 percent to 11.6 million euros, or $16 million. At constant exchange rates, sales would have grown by double digits in the U.S. Revenues in the rest of the world advanced 13.3 percent to 30.9 million euros, or $42.6 million.
As of March 31, the group had 149 directly operated stores and 72 franchised units. The company invested 8.5 million euros, or $11.7 million, in the quarter, compared with 6.1 million euros, or $8.4 million, in the year-ago period, mainly aimed at the development of its distribution network and the refurbishment of boutiques. For example, Tod’s Rodeo Drive store in Los Angeles reopened in April with the new Tod’s Home concept.