Italian luxury goods group Salvatore Ferragamo has reported a rise in sales in 2021, fueled by strong performance in China and the growth of e-commerce. This comes after the company experienced its first full-year operating loss since being listed on the Milan Stock Exchange a decade ago. According to Michele Norsa, the Deputy Executive Chairman of Ferragamo, sales in China are expected to continue growing at a double-digit rate. Asia is currently the largest market for the luxury brand, contributing more than 50% of its total revenues.
In 2020, Ferragamo saw a 33% decline in sales due to store closures and the absence of tourists caused by the global pandemic. However, the first nine weeks of 2021 have shown a positive trend for the company’s retail network, with digital sales skyrocketing by 86%. This is an encouraging sign for Ferragamo as it indicates a strong rebound in consumer demand.
Alongside the decline in sales, Ferragamo also experienced significant losses in earnings before interests and taxes. The company’s profits dropped from €150 million in 2019 to a €62 million loss in 2020. These losses were primarily attributed to impairment charges on assets, including properties and machinery.
Furthermore, there have been discussions about potential management changes within the company. The term of Ferragamo’s Chief Executive, Micaela Le Divelec, is set to expire in April. While there is uncertainty regarding the situation, Norsa has stated that a “normal process” is underway to appoint a new board of directors during the annual meeting.
In conclusion, despite the challenges faced in 2020, Salvatore Ferragamo is optimistic about its future prospects. The strong rebound in sales, particularly in China, along with the significant growth in e-commerce, has provided a much-needed boost for the luxury brand. As the company navigates through potential management changes, it remains focused on revitalizing the brand and ensuring continued success in the global luxury market.
Useful links:
1. Salvatore Ferragamo Official Website
2. Salvatore Ferragamo on Reuters
