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Ferragamo revenue continues to decline

Aug 9, 2018 Italy
Ferragamo revenue continues to decline
The Italy-based luxury brand Salvatore Ferragamo has announced another quarter with declining revenue. The Board of Directors gathered to approve the set of results for the period and announced a new CEO for the company
As of the 30th of June 2018, the Salvatore Ferragamo Group reported total revenue of 674 million euros down by 6.2% at current exchange rates (-3.4% at constant exchange rates) over the 718 million Euros recorded in the first half of 2017.

Revenue by distribution channel

As of the 30th of June 2018, the group's retail network counted on a total of 677 points of sales, including 407 Directly Operated Stores (DOS) and 270 Third Party Operated Stores (TPOS) in the Wholesale and Travel Retail channel, as well as the presence in Department Stores and high-level multi-brand Specialty Stores.

In the first half of the current year the retail distribution channel posted consolidated revenue down by 5.2% (-2.2% at constant exchange rates2), showing a -2.0% at constant exchange rates and perimeter (like-for-like) if compared to the first semester in 2017, affected by lower end-of-season sales. The wholesale channel, registered a decrease in revenue of 7.6% at current exchange rates (-5.3% at constant exchange rates) compared to similar period in 2017.


Revenue by geographical area

The Asia Pacific area was confirmed as the group's top market in terms of revenue, decreasing by 5.5% (-2.7% at constant exchange rates). After a very strong first semester in 2017 (+15.5% at constant exchange rates), the retail channel in China recorded a slightly negative (-1.0%). The trend in Hong Kong continued to be very strong (+32.0% at constant exchange rates). South Korea continued to show a weak trend, mostly due to the significant decrease of Chinese tourists and the rationalization of the store network. Europe and North America posted decreases in revenue of, respectively, 6.5% (-6.3% at constant exchange rates) and of 7.1% (-1.4% at constant exchange rates). The Japanese market registered a 4.2% decrease (-4.8% at constant exchange rates) in the first semester of 2018, mainly due to the strategic rationalization of the wholesale channel, while the retail channel registered a positive trend. Revenue in the Central and South America in the first semester of 2018 was down by 8.6%, penalized by the currencies trend (+0.5% at constant exchange rates).

Revenue by product category

Among the product categories, at constant exchange rates, footwear posted a decrease of 5.5% decrease, compared to similar period of 2017, while handbags and leather accessories showed a 1.6% increase and fragrances registered a 8.9% decrease.

Net Profit

Net Profit for the period, including the Minority Interest, was 59 million Euros, marking a 23.1% decrease (compared to 76 million euros reported in the first half of 2017). To highlight the tax rate increase, due to the lower deferred tax assets charge in the US, following the change in the tax rate.

New CEO

The Board of Directors, gathered to approve the second quarter results, also appointed Mrs. Micaela Le Divelec Lemmi as the Company's Chief Executive Officer, with powers of ordinary administration, except for those powers explicitly reserved for the Board of Directors' exclusive jurisdiction. Mrs. Micaela Le Divelec Lemmi has taken office immediately and until the next Shareholders Meeting.

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