Ferragamo’s sales, operating profit decline in first half

MILAN (Reuters) – Sales at Italian luxury goods group Salvatore Ferragamo declined by 7.2% at constant currencies in the first half, hit by double-digit drops in both North America and Asia Pacific, the company said on Thursday.

Revenues totalled 600 million euros ($657 million) in the period, broadly in line with an analyst consensus gathered by Reuters.

Operating profit roughly halved compared with the first six months of last year, to 47 million euros, as Ferragamo stepped up investments, mainly in communication, as part of efforts to turn around the brand.

“As we move further into the year, the higher share of new products, the continued marketing investments, together with compelling store and on‐line execution, will strengthen the brand image and create engagement with existing and new audience”, Chief Executive Marco Gobbetti said in a statement.

He added that the choices made and work done reinforce the confidence in the group’s medium‐term ambitions.

Sales in North America, where concerns have risen in recent months about a slowdown in luxury demand, fell by 18.6% in the January-June period, with the wholesale channel also hit by the rationalisation of the distribution network.

Sales in Asia-Pacific region were down 10.4% despite a positive performance in China, which was offset by a further weakness in South Korea and in the travel retail channel.

Last month UBS analysts warned that with CEO Gobbetti having joined Ferragamo only at the start of 2022 and Creative Director Maximilian Davis a little later, it could take until at least the end of 2023 before turnaround efforts start to bear fruit. Gobbetti was previously in charge at Burberry.