Nov 12, 2020
Salvatore Ferragamo sees net loss and sales drop in first nine months of 2020
Nov 12, 2020
Italian luxury brand Salvatore Ferragamo recorded a net loss of €96 million ($113.15 million) during the first nine months of 2020, hurt by sales which also fell 38.5%, due to the impact of the Covid-19 pandemic.
Ferragamo’s turnover during the first nine months of the year totalled €611 million. Turnover fell by a further 18.9% in the year’s third financial quarter, the brand said in a statement on Tuesday.
This drop in sales, which was much more marked during the first half of the year, was caused by the containment measures taken across the world due to the coronavirus pandemic, which led to store closures and a shut down of international trade and tourism.
Given the uncertainly surrounding the pandemic, the brand has not made any forecasts for the year. The brand has, however, shared that sales in China have witnessed further acceleration in October compared to in the third quarter and online sales growth is also continuing.
The Asia-Pacific region remains Ferragamo’s largest market, comprising 42.3% of total sales (excluding Japan). Sales during the first nine months fell by 30.6% in the region, but sales in its stores in China rose by 38.3% at constant currencies during the third quarter.
The brand’s Europe, Middle East, and Africa market saw sales decrease by 45%, North America saw sales drop by 45.1%, Japan by 30.9%, and South and Central America by 47.5%.
Ferragamo, which had been suffering from a problem of its brand positioning, experienced two difficult years in 2017 and 2018 before beginning to recover last year. However, the pandemic has put a damper on this recovery.
The group confirmed its medium to long-term objectives on Tuesday and plans to, “continue strengthening Salvatore Ferragamo’s positioning amongst the leaders of the luxury market,” while simultaneously reducing costs to limit the effect of the pandemic.
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