MILAN – The company takes off in Salvatore Ferragamo, strengthened by Greater China and North America.
The Florence-based company on Tuesday reported a preliminary turnover of 524 million euros in the first six months of this year, an increase of 44.1 percent compared to 363 million euros in the same period in 2020 – when the company, like its peers, was hit of the consequences of the COVID-19 pandemic. In the second quarter of 2021, sales increased by 91.3 percent compared to the same period last year.
The figures exclude the company’s fragrance business, which will be licensed to Inter Parfums Inc. from October and it is reclassified ceased operations.
As reported, the license lasts for an initial period of 10 years and marks a turning point for Ferragamo’s beauty business, as its fragrance department had been managed internally for the past two decades. To ensure the continuity of Made in Italy production and the highest level of synergies with the fashion house, Inter Parfums will operate through a wholly owned company based in Florence.
While no conference call was held with analysts on Tuesday, as is usual for Ferragamo when reporting preliminary revenue, the company said July continues to show solid revenue growth in direct-to-retail stores in the US, Greater China, South Korea and Latin America , both compared to 2020 and the same period in 2019. In the second week of July, the worldwide retail performance is on a par with the level before COVID-19.
The next conversation with analysts will be held after Ferragamo’s board meeting on September 7, when CEO Micaela le Divelec Lemmi resigns as reported. From the date all management powers are exercised by Vice President Michele Norsa. Marco Gobbetti, who will remain CEO of Burberry until the end of the year, succeeds le Divelec Lemmi as general manager and CEO.
In the first half, the increase in revenue was achieved despite the ongoing lockdown in some countries and bans and restrictions on international traffic caused by the COVID-19 pandemic. On June 30, the group operated 53 percent of the retail stores at full capacity.
At the end of June, the Group’s retail network consisted of 639 points of sale, of which 398 were directly operated stores.
In the first half, retail sales grew by 46.3 percent to 381.3 million euros, corresponding to 72.8 percent of total.
In the second quarter, retail revenues increased by 81.3 percent, with China, North America, Latin America and South Korea exceeding the level before COVID-19.
The direct e-commerce channel continues to consolidate solid growth with revenue of 70.6 percent.
The wholesale channel increased 41.1 percent to 138.1 million euros and accounts for 26.4 percent of the total amount.
Sales in the Asia-Pacific region rose 35.2 percent to 222.3 million euros, accounting for 42.4 percent of the total.
In the first half, the retail channel in Greater China had a 45 percent revenue growth at constant exchange rates. In particular, the retail channel in China and South Korea posted an increase of 47.4 percent and 22 percent in fixed exchange rates, respectively.
Revenue in Japan grew by 13.4 percent to 41 million euros, showing a gain of 55 percent in the second quarter.
Overall, the Asian continent represents more than 50 percent of total revenue.
The Europe, Middle East and Africa region, which is still penalized by shop closures and mainly by the limited flow of tourists, reported a 22.3 percent increase in revenue to 96 million euros, representing 18.3 percent of the total.
Sales in North America rose 103 percent to 137 million euros, accounting for 26.1 percent of the total. In the second quarter, revenues in the region more than quintupled compared to the second quarter last year.
Revenue in Central and South America in the first half of the year increased 64.8 percent to 27.4 million euros.
By category, sales of shoes increased by 40 percent to 223.2 million euros, corresponding to 42.6 percent of total revenue.
Leather goods and handbags increased by 48.5 percent to 235.4 million euros and account for 45 percent of sales.
Ready-to-wear rose 53 percent to 29.2 million euros or 5.6 percent of the total.
Creative Director Paul Andrew left the company in May, and so far no successor has been appointed, as the internal team is now in charge of the collections.
Ferragamo said it has renewed its licensing agreement with Vertime BV for the production and distribution of watches for a 10-year period starting January 1, 2023.
The company has signed a sustainability loan with UniCredit for a maximum total amount of 80 million euros. The credit facility is structured as a revolving credit line with a maturity of 2025 and has a rewarding mechanism linked to specific environmental and social sustainability indicators that will be verified annually. Last year, the company signed a financing credit line provided by Intesa Sanpaolo SpA for a maximum amount of 250 million euros, which was also linked to the luxury brand, which achieved certain sustainability goals.