Aeffe, the renowned Italian fashion group that owns brands like Moschino, is once again facing financial challenges. After grappling with the impact of the pandemic, the company managed to bounce back and achieve profitability in 2021. However, in 2022, Aeffe finds itself back in the red.
Despite these financial struggles, Aeffe’s turnover is showing signs of improvement. In January, the company reported a turnover of 352 million euros, marking a growth of 8.4% and bringing it back to pre-pandemic levels.
However, in 2022, Aeffe experienced a loss of 9 million euros, a significant contrast to the 12 million euros it had profited the previous year. A significant portion of the profit in 2021 was attributed to non-recurring tax benefits totaling 9.5 million euros, according to the company. Furthermore, the operating profit (Ebit) plummeted from 9.2 million euros in 2021 to 1.2 million euros in 2022.
Despite these losses, the gross operating profit (Ebitda) remained relatively steady, with a slight increase from 35.3 million euros in 2021 to 35.6 million euros in 2022. This accounts for 10.1% of the company’s total turnover. Aeffe credits this relatively positive outcome to its ability to navigate challenges in the Chinese market, where sales volumes and expected margins declined due to the local health crisis. Consequently, variable and fixed costs increased.
In terms of divisions, Aeffe’s ready-to-wear department experienced a decline in gross operating surplus, falling from 23 million euros in 2021 to 15 million euros in 2022, primarily due to the negative impact in China. On the other hand, the footwear and leather goods division witnessed a significant increase in Ebitda, nearly doubling from 12 million euros in 2021 to 21 million euros in 2022.
Over the past two years, Aeffe has accumulated a substantial debt, reaching 127 million euros as of December 31, 2022. This increase in debt can be attributed to two strategic investments totaling 90 million euros. One of these investments enabled the company to gain full control of Moschino by acquiring the remaining 30% of its capital. The other investment involved taking over the direct distribution of the flagship brand in China.
Despite these financial difficulties, Massimo Ferretti, Aeffe’s executive chairman, remains optimistic about the company’s future. He firmly believes that the investments made, particularly in the direct distribution of Moschino in China, will ultimately result in increased revenues and profitability. Ferretti also emphasizes the company’s commitment to developing its own brands and optimizing their organizational structure to drive growth.
Useful links:
– Aeffe Official Website
– Moschino Official Website
