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.
Italian luxury goods group Salvatore Ferragamo almost doubled sales in the second quarter after last year’s pandemic-led slump, with China, the Americas and South Korea driving the rebound.
However, revenues were still far from pre-Covid levels and the Florentine brand is counting on the arrival of Burberry Chief Executive Marco Gobbetti at the helm later this year to step up turnaround efforts that have so far struggled to yield results.
Ferragamo, which has been hit harder than most rivals by the fallout of the coronavirus crisis due to its exposure to travel spending, said on Tuesday first-half sales grew by 46.2 percent at constant exchange rates to 524 million euros ($617 million).
That is roughly a fifth below the level of January-June 2019, despite a 90.5 percent yearly jump in the second quarter alone.
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The trend is improving, however, as the month of July “is continuing to show a solid growth in revenues in directly operated stores in the United States, China, Korea and Latin America both versus 2020 and versus the same period of 2019”, the company said. It gave no guidance for the whole of 2021.
Most luxury groups have already reached, if not exceeded, pre-COVID levels. But the pandemic hit Ferragamo just as the family-owned firm strived to rejuvenate a brand famous for the shoes worn by Hollywood stars such as Audrey Hepburn.
The task will now fall to Gobbetti, who is credited with relaunching Burberry by injecting fresh life into the British label.
Sales figures for the first half, which do not include the perfume business, are broadly in line with analyst expectations gathered by Reuters.
Ferragamo, which did not provide a breakdown of revenues for the second quarter, said online sales had performed well in the period, rising 66 percent.
By Claudia Cristoferi; Editors: Valentina Za and Steve Orlofsky.
Further Reading: Ferragamo Confirms Designer Paul Andrew’s Exit
The exit comes as the Italian luxury brand shakes up its board. An in-house team will continue work on collections.
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The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.
As the French luxury group attempts to get back on track, investors, former insiders and industry observers say the group needs a far more drastic overhaul than it has planned, reports Bloomberg.