Salvatore Ferragamo Reports Weakening Sales Despite Strong Performance in China — Retail Bum

Italian luxury brand Salvatore Ferragamo’s sales and profits took a hit, with sales in North America and Asia Pacific registering a double-digit decline.

The company saw a 7.2% decline in constant currency rate in the first half, with revenue reaching $657 million for the period — largely in line with analysts’ estimates.

At the same time, Ferragamo’s operating profits halved to $51.5 million compared to the second half of 2022 as the company made investments in communications as part of a larger effort to turn around its brand image.

Sales in North America were down by 18.6% between January and June 2023, along with a decline in Ferragamo’s wholesale business due to the rationalization of its distribution network. Meanwhile, the Asia Pacific region saw a 10.4% decline in sales due to a lack of demand in South Korea and travel retail, which took the shine off the company’s strong performance in China.

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

Gobbetti added that the company’s efforts have helped reinforce confidence in the company’s mid-term strategy.

Still, analysts at USB do not expect to see the company’s efforts to pay off until at least the end of 2023, as Gobbetti was just appointed to his position at the start of 2022, while Creative Director Maximilian Davis was appointed in March 2023.

Originally published at https://retailbum.com on August 4, 2023.