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Ferragamo's revenue down by 33.5% in 2020

Mar 15, 2021 Italy
Ferragamo's revenue down by 33.5% in 2020
The Italian luxury house reported sales of 916 million euros in fiscal 2020, down by 33.5%. Salvatore Ferragamo announced it had suffered a net loss of 72 million euros in 2020, in an economic context highly affected by the COVID-19 pandemic
As of the 31st of December 2020, Ferragamo reported total revenue of 916 million euros, down by 33.5% at current exchange rates (-33.4% at constant exchange rates) when compared to the previous year. Revenue in the fourth quarter of 2020, improving when compared to the first nine months performance, registered a 20.4% decrease at current exchange rates (-19.9% at constant exchange rates). The drop in revenue in fiscal 2020 has been determined by the rapid diffusion of the pandemic and the consequent decisions taken by the National governments regarding prohibitions and lockdowns of the commercial activities and of the international traffic. The consequent closure of the majority of the group's store network in those countries and the significant reduction in traffic in the remaining stores, negatively impacted the results of the first six months of the year, that registered a progressive improvement, with alternating phases linked to the second wave of the pandemic and the consequent restrictions, in the second part on the year.

Distribution Channel

As of the 31st of December, the group's retail network counted on a total of 644 points of sales, including 395 Directly Operated Stores (DOS) and 249 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 fiscal 2020, the retail distribution channel posted consolidated revenue down by 29.2% (-28.6% at constant exchange rates), with a decrease of 29.9% at constant exchange rates and perimeter (like-for-like). In the last quarter of 2020, retail revenue decreased by 13.7% (-13.2% at constant exchange rates), with a -16.4% like-for-like performance and the contribution of the ecommerce channel registering a strong acceleration (+61.1% at constant exchange rates). The wholesale channel registered a decrease in revenue of 41.7% (-42.2% at constant exchange rates), mainly penalized by the performance of the Travel Retail channel and of Fragrances. In quarter four, wholesale revenue was down by 33.8% (-32.9% at constant exchange rates).  

Geographical Area

The Asia Pacific area is confirmed as the group's top market in terms of revenue, decreasing by 25.5% (-25.0% at constant exchange rates). The performance in the area in the last quarter of the year (-11.2% at constant exchange rates) was negatively impacted by the performance of the wholesale channel especially of the travel Retail, that was mostly affected by the pandemic, while the performance of the retail channel was positive. In the same period, the retail channel in China registered an increase in revenue of 33.9% at constant exchange rates bringing the full year performance to a +11.3% at constant exchange rates. Also, the Directly Operated Stores in Korea registered a revenue increase, while in Taiwan (+12.9% in quarter four). The retail revenue was in line with fiscal 2019, supported by the double-digit increase registered in the second part of 2020 that compensated the negative performance of the first six months. The Japanese market registered a 24.5% decrease in Revenues (-25.0% at constant exchange rates) in fiscal 2020, with quarter four (-6.7% at current exchange rates and -7.4% at constant exchange rates) benefitting from the positive performance of the Retail channel (+2.9% at current exchange rates and +1.3% at constant exchange rates). Overall, the Asian continent represents over 50% of total group’s revenue in fiscal 2020. EMEA posted, in FY 2020, a decrease in revenue of 42.5% (-41.9% at constant exchange rates), with fourth quarter (-34.0% at constant exchange rates still strongly penalized by the stores closures and the lack of tourists’ flows in the period. North America recorded revenue decrease of 39.4% (-41.4% at  constant exchange rates) in FY2020,  with quarter four down by 26.6% (-27.5% at constant exchange rates). Revenue in Central and South America in FY 2020 was down by 35.6%, (-29.5% at constant exchange rates). Fourth quarter 2020 was down 10.7% (-2.5% at constant exchange rates), with all the markets excluding Mexico.  

Product Category

All product categories, at constant exchange rates, reported a decrease in fiscal 2020, compared to the same period of last year.

Net Profit

Net Profit for the period was negative for 72 million euros versus 87 million euros positive in the previous year.

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