Italian luxury goods group Ferragamo reported a 7.2% decline in sales during the first half of the year. This decrease was mainly due to significant drops in both North America and the Asia Pacific region. Despite the decline, the company’s revenues reached €600 million, which met analyst expectations. On the operating profit front, Ferragamo experienced a nearly 50% decrease compared to the same period last year, totaling €47 million. The company attributed this decline to increased investments in communication as part of their efforts to revitalize the brand.
Ferragamo’s Chief Executive, Marco Gobbetti, expressed confidence in the company’s medium-term ambitions. He emphasized the importance of introducing new product offerings, investing in marketing, and improving store and online operations to strengthen the brand image and engage both existing and new customers.
Sales in North America saw a significant 18.6% decrease, raising concerns about a potential slowdown in luxury demand in the region. The wholesale channel also suffered due to the rationalization of the distribution network. In the Asia-Pacific region, sales declined by 10.4%, despite China’s positive performance. Weak performance in South Korea and the travel retail channel offset the growth in China.
UBS analysts cautioned that Ferragamo’s turnaround efforts may not fully manifest until the end of 2023. They pointed out that both CEO Marco Gobbetti and Creative Director Maximilian Davis are relatively new to the company, having joined in 2022. Gobbetti previously held a leadership position at Burberry.
Useful links:
1. Ferragamo Official Website
2. UBS Official Website
