The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
FLORENCE, Italy — Salvatore Ferragamo SpA shares declined the most in almost five months after the Italian luxury shoemaker reported an unexpected drop in third-quarter sales, sparking concern it will need to offer discounts to clear inventory in the run-up to Christmas.
Revenue declined 6.2 percent at constant exchange rates in the three months through September, the Florence-based company said late Monday. Analysts expected sales to be unchanged from the year-earlier period. Wholesale revenue fell 19 percent. The shares fell as much as 7 percent in Milan, the most since June 27.
The results don’t bode well for the holiday season, as Ferragamo said it’s being “prudent” with its full-year outlook with luxury demand cooling. The maker of $1,590 pumps may struggle in the fourth quarter after a 16 percent increase in inventory and given its reliance on US departments stores, said Rogerio Fujimori, an analyst at RBC Capital Markets in London.
“Since third-quarter sales were below plan, inventories at the end of September were quite high, which should mean heightened markdown activity in the fourth quarter,” Fujimori wrote in a note.
By Thomas Mulier; editor: Matthew Boyle.
Former Louis Vuitton CEO Michael Burke is stepping back from overseeing LVMH’s sprawling Fashion Group just four months after he was named the unit’s chief executive, BoF has learned.
Mytheresa on Wednesday reported another quarter of standout growth in an otherwise dreary luxury e-commerce sector amid reports that the German e-tailer is considering going private and acquiring Net-a-Porter.
The brand isn’t the only one struggling in a cooling luxury market, but the weak numbers increase pressure on CEO Jonathan Akeroyd to deliver Burberry’s long-awaited turnaround.
The luxury parka maker is aiming to elevate its image as it faces strong competition.