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Ferragamo with falling revenue

Feb 4, 2019 Italy
Ferragamo with falling revenue
A global leader in the luxury sector, Ferragamo released the group’s preliminary consolidated revenue for fiscal year 2018, which amounted to 1 347 million euros, down by 3.4% at current exchange rates
As of the 31st of December 2018, the Salvatore Ferragamo Group reported total revenue of 1 347 million euros, down by 3.4% at current exchange rates (-1.7% at constant exchange rates). Revenue in the fourth quarter registered a 3.6% decrease, penalized by the currencies trend (-1.8% at constant exchange rates), by the lower incidence of promotional sales in the primary channel, by lower revenue in the secondary channel and by the negative trends of the wholesale business.


Distribution channel

As  of  the 31st of  December the group's retail network counted on a total of 672 points of sales, including 409 Directly Operated Stores (DOS) and 263 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 2018 the retail distribution channel  posted  consolidated revenues down by 3.0% (-1.1% at constant exchange rates), with a decrease of 1.4% at constant exchange rates. Retail revenue generated in the fourth quarter remained stable at constant exchange rates, with a -1.2% total like- for-like performance.
The wholesale channel, penalized during all year by the destocking activity and the strategic rationalization, registered a decrease in revenues of 3.8% (-2.7% at constant exchange rates). In quarter 4 wholesale revenue were down by 5.4% at constant exchange rates, mainly due to the unfavourable performances in EMEA and US, while the Asia Pacific area and the Travel Retail channel registered positive trends.

Geographical area

The Asia Pacific area is confirmed as the group's top market in terms of revenue, decreasing by 1.0%  (+0.8% at constant exchange rates), with a positive performance in Greater China, partially penalized by the negative performance in South East Asia. Specifically, in the fourth quarter, the retail channel in China recorded a solid revenue growth of 7.6% (+10.1% at constant exchange rates2), if compared to similar period in 2017. EMEA posted, in 2018, a decrease in revenue of 6.1% (-5.9% at constant exchange rates), mainly owed to the negative wholesale business in the last part of the year due to the delayed deliveries following the change of a commercial partner in a strategic market in the Middle East. North America recorded revenue decrease of 5.4% (-2.4% at constant exchange rates) in  FY 2018, mainly impacted by the negative trend of the department stores sales. The Japanese market registered a 0.4% decrease in Revenue (-1.0% at constant exchange rates), with retail stores recording a positive performance at constant exchange rates both in fiscal 2018 and in quarter 4, while negatively impacted by the strategic rationalization of the wholesale channel. Revenues in Central and South America in 2018 were down by 2.3%, but up by 3.8% at constant exchange rates, mainly due to the performance of the retail network.

Product category

At constant exchange rates, handbags and leather accessories were up 2.6% and fragrances 6.5%. Footwear posted a 3.9% decrease at constant exchange rates in 2018.

Photo by rawpixel on unsplash

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