Dive Brief:
- Salvatore Ferragamo SpA, the parent company of the Salvatore Ferragamo Group, reported Thursday that consolidated revenues for the nine months ended September 30 were down 8.3% at current exchange rates to 844.1 million euros, or approximately $893.6, versus 920.7 million euros for the same period last year.
- Retail consolidated net sales were 599.4 million euros, down 10.2% from 667.6 million euros for the same period in 2022. Meanwhile, wholesale net sales for the period dropped 16.6% to 217.2 million euros versus 260.4 million euros last year.
- Revenue declines were “impacted by a negative perimeter effect both in Retail and Wholesale channels,” the company stated in its release, adding that its retail sector was “penalized by a general softening market in the third quarter.” Wholesale declines were attributed to a rationalization of third parties’ network, plus “reduced international travel affecting the Duty-Free channel and the deceleration of the US market.”
Dive Insight:
The luxury market might be ready for a reset, as early Q3 earnings indicate an overall sector slowdown is afoot.
However, Ferragamo has been decelerating for most of 2023, with revenues down 4% in Q1, and net profit for the first half of 2023 was down 65.4% to 21 million euros, versus 62 million euros in June 2022.
It’s a transitional period for the company, which appointed Maximilian Davis to the creative director role in March 2022, and his first collection hit shelves in February 2023.
“In these nine months we continued to invest in our business, making critical choices and progressing in the execution of our strategic priorities, in line with our plans,” Marco Gobbetti, Ferragamo’s CEO and general manager, said in the release, adding that the company was “pleased by the early results” stemming from collections designed by Davis.
“The overall sales performance reflects, at this stage, the ongoing focus on quality of sales and rationalization of distribution networks, as well as the evolution of the offer and the acceleration of the transition to the new creative course, the full potential of which, will become evident in 2024,” Gobbetti said.
Sales in the Asia Pacific region dropped 16.4%, with the Japanese market down 11.6%. North America was down 20.1%, and Central and South America were down 3.1%. Sales for EMEA were up 3.1%.
By category, footwear was down 9.7%, leather goods were down 16%, apparel was down 9.8%, accessories were down 4.3%, and fragrances were down 10.7%.
“The optimization of the product portfolio and the enhanced marketing activities are continuing to strengthen the brand and to create engagement with existing and new audiences,” Gobbetti said. “Whilst the wider market environment is increasingly uncertain, our mid-term ambition is confirmed.”
