Companies

Tod's: sales down by 43.5%

Sep 10, 2020 Italy

The impact of the pandemic has heavily affected the sales and results of all the group's brands, in all geographic areas, product categories and on both sales channels

“After a good start of the year, with sales growth across all regions, starting from the end of January, the world has completely and drastically changed, with the arrival of the COVID-19 pandemic. Facing this unprecedented crisis, the group's first priority was to protect the health of employees and customers, with the closure of stores and the interruption of production activities. Due to the rapid expansion of contagions all over the world, the second quarter was worse than the first one, since almost all the stores were closed for most of the period. We have adopted a policy of strong prudence and have decided to limit product deliveries on both sales channels, to reduce the risk of unsold stock. We have focused even more on the e-commerce channel, which is growing very well, is giving us excellent results and which allows us to reach also many new customers. In the latest weeks, we are registering encouraging signs of recovery, particularly in China, where were we are recording double-digit growth rates, while Europe and the Americas remain weak, heavily penalized by the lack of tourists. The results of the current year will therefore be certainly affected by the pandemic, even if it is still too early to quantify the impact, given the low visibility on the evolution of the situation”, commented Diego Della Valle, Chairman and CEO of the group.

Sales

In the first half of 2020, consolidated sales totalled 256.9 million euros, down by 43.5% from the first semester in 2019; the sharp decline in revenue reflects the effects of the restrictions adopted to deal with the spread of the COVID-19 pandemic, such as the closure of shops and severe restrictions on the movement of people, with an exceptionally negative impact on tourist flows. The impacts were much more evident in the second quarter of 2020, when the lockdown, which in the first quarter had mainly characterized the Greater China area, was practically extended worldwide.

In the second quarter of 2020, sales reached 104.1 million euros, down by 56.3% from the second quarter in 2019, mainly due to the long closure period of most of the stores. In the current year, the impact of currency fluctuations is not meaningful: at constant exchange rates, meaning by using the average exchange rates of the first six months of 2019, including the related effects of hedging contracts, sales would have been 256.5 million euros, down by 43.6% from the first half of 2019.

Impact of the COVID-19 pandemic

The pandemic has heavily affected the sales results of all the group's brands, in all geographic areas, product categories and on both sales channels. The trend in revenue by geographical area also reflects the different timing of store closings and openings and influences the results of the different brands, based on their geographical mix.

By brand, Tod's was most heavily impacted tag, with a decline in sales of 46.1%. Fay with -42.4%, Hogan -41.9% and Roger Vivier with 39.2% were also on the red.

All products were hit by the pandemic, with apparel sales falling by 38.1%, shoes declined by 42.4% and leather goods and accessories by 51.8%.

In terms of geographies, the Americas region was the one taking the highest hit with a decline in sales of 52.8%. It was followed by Italy with a decrease in sales of 47.6% and Europe with a - 46.9% variation. Sales in Greater China fell by only 33.4%.

As of the 30^th of June 2020, the group’s distribution network was composed by 292 DOS and 112 franchised stores, compared to 288 DOS and 114 franchised stores as of in the 30^th of June 2019. In the first semester, sales of the retail channel fell by 42.0%, while sales in third party stores declined by 47%.

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