Salvatore Ferragamo appoints new CEO as H1 revenue and profit decline

The board of directors of Salvatore Ferragamo S.p.A. in a statement announcing the half year financial results said that total revenues reached 674 million euros (787 million dollars), down 6.2 percent at current exchange and 3.4 percent at constant exchange rates over the same period in 2017. The board also appointed Micaela Le Divelec Lemmi as the company's new Chief Executive Officer.

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The net profit for the period, Salvatore Ferragamo said, was 59 million euros (68.9 million dollars), a 23.1 percent decrease, while Group net profit was 57 million euros (66.5 million dollars), a decrease of 26.7 percent.

Highlights of Ferragamo’s H1 financial results

As of June 30, 2018, the Group's retail network consisted of 677 points of sales, including 407 directly operated stores (DOS) and 270 third party operated stores (TPOS) in the wholesale and travel retail channel, as well as the presence in department stores and multi-brand specialty stores.

In 1H 2018 the retail distribution channel posted consolidated revenues down 5.2 percent or 2.2 percent at constant exchange rates, showing a decline of 2 percent at constant exchange rates and like-for-like sales. The wholesale channel, the company said, registered a decrease in revenues of 7.6 percent at current exchange and 5.3 percent at constant exchange rates.

Revenues in the Asia Pacific area decreased by 5.5 percent or 2.7 percent at constant exchange rates. The retail channel in China, recorded a 1 percent drop in revenue performance in 1H 2018 at constant exchange rates, while Hong Kong recorded a 32 percent rise at constant exchange rates. South Korea, the company added, continued to show a weak trend, mostly due to the significant decrease of Chinese tourists and the rationalization of the store network.

Revenues in Europe posted a decrease of 6.5 percent or 6.3 percent at constant exchange rates. North America recorded a revenue decrease of 7.1 percent or 1.4 percent at constant exchange rates. The Japanese market registered a 4.2 percent or 4.8 percent decrease at constant exchange rates, while revenues in the Central and South America were down 8.6 percent but were up 0.5 percent at constant exchange rates.

Among the product categories, at constant exchange rates, footwear posted a decrease of 5.5 percent, while handbags and leather accessories showed a 1.6 percent increase and fragrances registered a 8.9 percent decrease.

Salvatore Ferragamo’s H1 gross profit declines 7.7 percent

In 1H 2018 the company’s gross profit decreased by 7.7 percent to 432 million euros (504.4 million dollars), while its incidence on revenues was down 110 basis points, moving to 64.1 percent from 65.2 percent of 1H 2017. The gross operating profit (EBITDA) decreased by 14.5 percent to 117 million euros (136.6 million dollars) and the operating profit (EBIT) was down 18.5 percent. The profit before taxes amounted to 80 million euros (93.4 million dollars), down 18.8 percent against 1H 2017.

Salvatore Ferragamo Group expects sales, margins and results for full year 2018 to be negatively impacted by the current currencies trends, by the enduring unfavourable retail channel mix and by the difficult wholesale environment.

Salvatore Ferragamo appoints new CEO

During the board meeting, the company appointed Micaela Le Divelec Lemmi as new Director replacing director Raffaela Pedani who, the company said, resigned with immediate effect.

The company said, Micaela Le Divelec Lemmi, who joined the Ferragamo Group on April 2018 as general manager, has a long-term experience in the fashion and luxury industry having worked for 20 years within the Kering Group with growing responsibilities. She first joined the finance department, then she has been appointed CFO at Gucci in 2008 and executive vice president and chief operations officer in 2013. In 2014 she also became Richard Ginori’s CEO, under the control of the Kering Group, until 2015 when she has been named executive vice president and chief consumer officer of Gucci.

The company added that Micaela Le Divelec Lemmi has also taken the office as the Director in charge of the internal control and risk management system, and as a member of the committee of product and brand strategies of the company.

Picture credit:Facebook/Salvatore Ferragamo