Drop in core profits for Ferragamo

Italy
Published:  16 November, 2017
Ferragamo's new Vara Rainbow bag collection

The family-owned luxury Italian fashion brand has reported a 25.1% fall in gross operating profit for the first nine months of 2017.

Ferragamo’s revenues were down -0.9% in the period to €1,005 million (€ 1,014 million at September 30, 2016), with revenue in retail recording a +1.2% increase but down -4.7% in wholesale “due to the destocking activity” aimed at allocating free space for new, more contemporary products.

Gross Operating Profit (Ebitda) stood at €162 million, down -25.1% versus €216 million in the corresponding period a year ago. Net Profit was €79 million, down -28.3% against €110 million at September 30, 2016.

Among the product categories, footwear posted a -1.2% decrease, leather handbags and accessories -0.6%, while fragrances increased +3.2% in the period. Paul Andrew’s women collection first intake is reported to be positive, but is not yet materially contributing to results. Andrew was appointed as Ferragamo’s Creative Director, Women's Collections, on October 5.

In an interview with Italian newspaper Corriere della Serra, Ferrucio Ferragamo, Board Chairman, said the family has received indirect acquisition offers but does not intend to sell the Company. Further, an agreement is said to have been signed by the members of the Ferragamo family, whereby it establishes that the group's Chief Executive will always be a person from outside the family, and that the entrance of family members to the Company is subject to an assessment so as to “assure skills and experience suitable for the performance of duties”.

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