World Footwear

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Ferragamo with declining revenue

Sep 16, 2020 Italy
Ferragamo with declining revenue
As of the 30th of June 2020 the Salvatore Ferragamo Group reported total revenue of 377 million euros down by 46.6% at current exchange rates (-46.9% at constant exchange rates), which compares to 705 million euros in the first half of 2019
Revenue in the second quarter of 2020 registered a 60.1% decrease at current exchange rates (-59.4% at constant exchange rates). The drop in revenue has been determined by the rapid diffusion of the pandemic caused by COVID-19 and the consequent decisions taken by the National governments regarding the  lock-downs and the closure of the majority of the group's store network in many countries and to a significant reduction in traffic in the stores.

Revenue by Distribution Channel

As of the 30th of June 2020, the group's retail network counted on a total of 643 points of sales, including 389 Directly Operated Stores (DOS) and 254 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 six months of 2020 the retail distribution channel posted consolidated revenue down by 41.0% (-41.1% at constant exchange rates), with a decrease of 41.0% at constant exchange rates and perimeter (like-for-like), compared to the first half of 2019, with the primary and secondary channel posting a similar performance. In the second quarter 2020 retail revenue decreased by 51.2% (-50.7% at constant exchange rates), with a -51.0% like-for-like performance. The wholesale channel registered a decrease in revenue of 56.4% (-56.8% at constant exchange rates), mainly penalized by the performance of the Travel Retail channel and of Fragrances. In the second quarter of 2020 wholesale revenue were down by 75.7% (-74.4% at constant exchange rates).

Revenue by Geographical Area

The Asia Pacific area is confirmed as the group's top market, reaching over 44% of total revenue, decreasing by 39.9% (-39.1% at constant exchange rates) compared to similar period in 2019. The performance in the area in the second quarter (-35.3% at constant exchange rates), recovering vs. the previous quarter, benefitted from the positive performance of the retail channel in China, which recorded a revenue growth of 11.6% at constant exchange rates. A similar growth trend has been registered, in the second quarter, in the retail channel in South Korea, that reported a positive performance in the first half of 2020. The Japanese market registered a 37.4% decrease in revenue (-39.3% at constant exchange rates) in the first half of 2020, with the second quarter of 2020 down by 56.1% (-58.4% at constant exchange rates) strongly penalized by the stores closures in the period. Overall, the Asian continent represents over 54% of total group’s revenue. EMEA posted a decrease in revenue of 51.7% (-51.2% at constant exchange rates) in the first half of the year, with quarter two (-71.9% at constant exchange rates) strongly penalized by the stores closures and the lack of tourists’ flows in the period. North America recorded revenue decrease of 54.4% (-57.8% at constant exchange rates) in the first semester of 2020, with the second quarter of 2020 down by 81.1% (-83.2% at constant exchange rates) strongly penalized by the stores closures in the period, due to the lock-down measures and in lower extent to the social protests. Revenue in the Central and South America in the first six months of 2020 were down by 54.6%, (-50.1% at constant exchange rates), with quarter two down by 89.2% (-83.1% at constant exchange rates) strongly penalized by the stores closures in the period.


Revenue by Product Category

All product categories, at constant exchange rates, reported a decrease in the first six months of 2020 compared to similar period of last year.

Gross Profit

In the first half of 2020, Gross Profit decreased by 50.5% to 226 million euros.

Net Profit

The Net Profit for the period, including the Minority Interest, was negative for 86 million euros compared to 60 million euros positive in the first half of 2019. In the first six months of 2020 the Group registered negative Net Profit of 82 million Euros, which compares to 58 million euros positive in the first six months of 2019.

Image credits: studiochristison.com

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