Ferragamo Profits Decline In 2018 Will Be 21% Plus Channel Investment

On the evening of March 12th, Salvatore Ferragamo S.p.A., the parent company of Salvatore Ferragamo group, Italy's high-end luxury brand (hereinafter referred to as "Ferragamo Ag") released its 2018 earnings report.

As of December 31, 2018, the company's turnover fell 3.3% to 1 billion 347 million euros, operating profit fell 19.5% to 150 million euros, net profit fell 21.1% to 90 million euros.

From the point of view of distribution channels, during the reporting period, the company's retail network covers 672 sales outlets, including 409 direct outlets, 263 wholesale and tourist retail outlets, third party business shops, department stores and high-end brand stores.

In fiscal year 2018, retail channel turnover decreased by 3% compared with the same period in fiscal year 2017, wholesale channel sales decreased by 3.8% compared with the same period last year, and wholesale channel sales in the fourth quarter fell 5.4% over the same period. The group pointed out that the company performed poorly in the EMEA region (Europe, the Middle East, three regions of Africa) and the United States, but showed positive performance in the Asia Pacific region and tourism retail channels.

From the point of view of regional income, the Asia Pacific region is becoming the main market of the group during the reporting period, although it has decreased by 1% compared with the same period in 2017. The revenue of the Asia Pacific region is 505 million euros, and its revenue accounts for 37.6%.

Especially in the Greater China region, sales performance was good, retail channel grew by 7.6%, and fixed exchange rate increased by 10.1%.

Southeast Asian markets are not performing well.

European and North American markets account for nearly 5 of revenue.

The Japanese market ranked third.

Judging from the category, the sales revenue of footwear sales is the highest during the reporting period, with annual sales of 550 million euros, and the proportion of income is 41.2%.

Followed by leather goods, annual sales of 520 million euros, accounting for 38.7% of revenue.

Fragrance products ranked third, with annual sales of 94 million euros.

At the back are accessories and ready-made clothes.

Compared with the 2017 fiscal year, sales of fragrances and leather goods increased by 6.5% and 2.6% respectively, but sales of footwear, accessories and clothing decreased.

Among them, footwear sales fell by 3.9%.

Ferragamo analysis pointed out that in 2019, the consumption of personal luxury goods market will maintain a 6% growth rate, but the growth rate of 10% over 2018 will tend to slow down.

The role of physical distribution channels in brand performance is still limited. Rational distribution of distribution channels and digital pformation will be the choice of most brands.

China's luxury consumption is shifting from overseas to China, and this trend will continue.

While attracting the new generation of consumers, the traditional luxury brands should also pmit new brand attitudes to the old consumers with the help of the commodities that conform to the trend of the times or the signs that are injected into the products with the characteristics of the times.

In the 2018 fiscal year, air passenger traffic increased by 6.5%, which is still strong in 2019.

The 20% increase in fiscal year 2018 allowed brands to see the potential of the online luxury market. In 2019, the online market will still be the focus of brand layout. In the future, it will invest in Daquan channel and seek more opportunities to cooperate with the third party.

Statistics show that Ferragamo is the parent company of the Ferragamo group. It is the leading brand of the global luxury market. Its history can be traced back to 1927. It mainly focuses on the innovation and manufacture of shoes, leather products, garments, silk and accessories, as well as the fragrance of men's women.

The group's products also include spectacles and watches produced by licensed manufacturers.

As of December 31, 2018, the group has around 4000 employees and 672 stores worldwide.

Ferragamo currently has 97 stores in mainland China, Hong Kong and Macao and Taiwan, including 6 in Beijing.

In addition, Ferragamo has official website (official mall) and WeChat online boutique on China line.

Tmall and Jingdong did not set up official flagship stores.

Author: Wang Xiaoran Kong Yaoyao