Furla USA, the American arm of the esteemed Italian luxury brand, has recently made headlines with its Chapter 11 bankruptcy filing, a move attributed to the unprecedented effects of the ongoing Covid-19 pandemic. This decision, however, does not signal an exit from the U.S. market for Furla. Rather, the brand is dedicated to overhauling its strategies and operations to set the stage for a strong comeback post-pandemic.
CEO Elena Moncigoli has expressed confidence in Furla’s fundamental business model and anticipates a resurgence in sales once conditions improve. Nevertheless, the brand has acknowledged the current uncertainties caused by the global health crisis and is taking proactive measures to streamline its financial standing for the benefit of all stakeholders.
The recent court filings by Furla USA have unveiled the tough circumstances that led to the bankruptcy declaration. Even prior to the pandemic, the brand was grappling with a decline in foot traffic at its retail stores. The onset of Covid-19 only exacerbated this situation, leading to temporary closures of all U.S. outlets in March and a subsequent decrease in customer visits upon reopening.
With 14 stores currently in operation across the United States, including a strong presence in outlet locations, Furla faced particular challenges with stores in Indianapolis and Boston, which heavily relied on local customer traffic rather than tourists. As part of the bankruptcy process, the company intends to close four physical stores to better align with its revised business strategy.
The brand’s revenue breakdown illustrates its reliance on physical retail, which accounted for the majority of sales. Wholesale operations and e-commerce also played significant roles, with the latter experiencing relatively low sales figures. The closure of stores during the pandemic significantly impacted Furla’s financial performance.
In response to the pandemic, Furla USA implemented furloughs affecting a substantial portion of its workforce. Currently, the company has a reduced staff size, with plans to focus on enhancing e-commerce capabilities and wholesale distribution as part of its cost-saving measures.
Founded in Italy nearly a century ago, Furla expanded to the U.S. market in the late 1980s and now boasts a global presence with hundreds of stores worldwide. Despite the current challenges, Furla remains steadfast in its commitment to weather the storm, revamp its operations, and seize emerging growth opportunities in the luxury sector in America.
For more information on Furla and its luxury offerings, visit their official website here. To stay updated on the latest trends and news in the luxury fashion industry, check out Business of Fashion.
