MILAN — After a shakeup on the design front, Salvatore Ferragamo SpA is going through an executive turnover with the exit of chief executive officer Eraldo Poletto, effective March 8, following the approval of the 2017 financial statements.
“To Mr. Poletto, the most vivid appreciations for having contributed, during his tenure, to the start of a new chapter in the company’s history, characterized by a great dynamism, an important digital breakthrough and a special attention to the brand and to the product, also manifested during the recent Milan fashion shows,” the Florence-based company said in a brief release issued on Tuesday, after trading hours in Milan where the company is publicly listed. Poletto as of Tuesday owned 5,000 ordinary shares of the company, which is headed by chairman Ferruccio Ferragamo.
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No reason for the sudden exit was provided, but the company’s performance has been slowing and the last quarter showed no sign of an improvement and falling sales. As reported, the Florence-based company saw preliminary 2017 revenues decline 3.1 percent to 1.34 billion euros, compared with 1.43 billion euros in 2016. At constant exchange rates, sales were down 1.4 percent.
Revenues in the last quarter decreased 8.4 percent, penalized by the currencies trend and by lower promotional sales in the primary own-retail channel, thanks to better control of inventories, according to the company.
The Asia-Pacific area was confirmed as the group’s top market, representing 36.6 percent of total revenues. In the region, sales declined 2.1 percent to 510.6 million euros, penalized by the soft trend in South Korea, mostly due to the significant decrease of Chinese tourists, and the ongoing negative performance in particular in Hong Kong. Conversely, the retail channel in China showed continued growth, posting a 2.5 percent uptick, or 7 percent at constant exchange.
Revenues in all other geographic markets were down last year, and the core footwear and leather goods categories also suffered. Sales of shoes decreased 3.6 percent to 589.2 million euros, representing 42.3 percent of total sales. Handbags and leather accessories were down 2.4 percent to 516 million euros, accounting for 37 percent of total sales.
In December, the company issued a warning on medium-term targets. Ferragamo said it was evaluating its development plans and “significant IT and marketing investments, presented by the management, in order to relaunch the brand and to optimize the group’s commercial, production and logistic processes.” The board “recognized an extension into the financial year 2018 of the transition phase, that characterized 2017, and its related reflections on the medium-term ambitions.” These, said the board then, would be “more difficult to be achieved.”
The executive joined the company from Furla in August 2016, after leading that brand’s expansion around the world for almost six years. Before Furla, he was previously president of strategic development and international business worldwide at Retail Brand Alliance Inc., parent of Brooks Brothers. Poletto exited Furla in November 2012 for a brief stint as ceo of Alfred Dunhill, but returned to the Italian accessories firm in spring 2013.
Poletto succeeded Michele Norsa, who led the house for a decade and through its public listing in 2011.
One of Poletto’s first decisions at Ferragamo was to name a trifecta of designers rather than one single creative director, in the wake of Massimiliano Giornetti’s exit in March 2016. Poletto opted to appoint Paul Andrew, Fulvio Rigoni and Guillaume Meilland in charge of women’s shoes, women’s ready-to-wear and men’s rtw, respectively. In October last year, Rigoni exited the company, following a mixed response to his designs, and Andrew was charged with the women’s wear rtw collections, too. The company held its first coed runway show last week to unveil its men’s and women’s fall 2018 collections.