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Ferragamo sales drop 7 percent in 2023 on ‘softening luxury demand’

Salvatore Ferragamo said revenues fell 7.6 percent to EUR 1.16 billion in 2023, with the Italian luxury firm citing a “softening luxury demand,” especially in the second part of the year.

SEE ALSO: Salvatore Ferragamo to buy minority stake in three Greater China joint ventures

By region, Asia Pacific registered a 13.1 percent decrease in net sales during 2023. Sales in the region in the fourth quarter did, however, gain 2.2 percent, with wholesale recording growth and retail sales in Greater China up double-digits.

In 2023, the Japanese market saw sales fall 12.6 percent, with sales down 6.5 percent in the fourth quarter.

Elsewhere, North American sales for the year fell 19.3 percent, with Central and South America annual sales dropping 7.2 percent. The EMEA region did see growth in 2023, up 3.4 percent during the twelve months.

As a result of the lacklustre sales results, net Profit for the period, including the minority interest, fell 60 percent to EUR 26 million.

“In 2023 we made good progress in our strategic priorities in terms of brand, product, communication and network. We improved quality of sales and invested to strengthen the brand while driving engagement and we have seen some pleasing results from new products,” said Marco Gobbetti, chief executive officer and general manager.

“The Fall-Winter ’24 fashion show held in February, along with the inauguration of the Milan women’s boutique under the new store concept, gained excellent resonance and visibility. We will continue to work on the full deployment and optimization of the product offer to drive desirability and engagement, generating interest through an impactful communication, also maximizing the potential of all digital touchpoints.

“We will continue the optimization of the network and at the same time accelerate the rollout of the new store concept. Notwithstanding some impact of the current market backdrop on the timing of our initial assumptions, we continue to pursue our growth ambition, while also protecting profitability through ongoing attention to the quality of sales and disciplined focus on costs.”

Following the most recent earnings updates from international firms, 2023 has proven pilorising for the luxury industry, with main players LVMH, Hermès, and Tod’s revealing solid sales growth for the year. Meanwhile, rivals Kering and Burberry, like Ferragamo, announced a drop in sales for the same period, thanks to a softening in demand for their respective luxury wares.