Revenues Dropped 14.9% as the Company’s Leading Brands Felt a Slowdown in Italy and the United States
Italian company Aeffe SpA observed a significant decrease in its group’s shares on the Milan Stock Exchange by 5.3 percent to 0.68 euros on Thursday afternoon. This drop was largely due to the company’s lackluster performance in the first half of the year.
Aeffe, the parent company of renowned brands Moschino, Alberta Ferretti, Philosophy di Lorenzo Serafini and Pollini, continues to operate at a loss. The company noted shrinking revenues and profitability for the first half of the year. By June 30, consolidated revenues had fallen 14.9 percent to 138.6 million euros, a stark contrast to the 162.9 million euros recorded in the same period last year.
The revenues of the ready-to-wear division decreased by 12.5 percent to 94 million euros, and sales of the footwear and leather goods division plummeted by 25 percent to 56.5 million euros. The net loss consequently expanded to 20.4 million euros from the 11.7 million euros recorded in the first half of last year.
“The unsatisfactory results of the first half of the year are the reflection of an extremely complex market situation. The slowdown in consumption in key countries for us, such as Italy and the United States, has significantly impacted our group performance,” admitted Massimo Ferretti, executive chairman of Aeffe. Despite the challenging moment, the company is gearing up to face the complexity of the situation. Ferretti expressed optimism in a recovery of consumer interest in fashion goods in the short term. He also highlighted their satisfaction with the renewed stylistic direction of the Moschino brand, which will aid in internationally repositioning the brand.
In June, Moschino unveiled the brand’s first menswear collection and women’s resort line designed by creative director Adrian Appiolaza. Appiolaza joined Moschino at the completion of January, following the sudden death of Davide Renne, who had taken over from Jeremy Scott’s decade-long tenure.
In H1, earnings before interest, taxes, depreciation and amortization amounted to 400,000 euros, falling substantially from 8.5 million euros last year. The operating loss in the period totalled 15.8 million euros, an increase from the operating loss of 7.9 million euros from the previous year.
Sales in different regions faced suppressions as well. Italy had a 15.5 percent decrease to 57.6 million euros, Europe had a fall of 16.2 percent to 42.1 million euros, Aeffe sales in Asia and other regions had a drop of 8.7 percent to 31.4 million euros, and sales in America decreased by 25.6 percent to 7.5 million euros. Other revenue streams were also impacted. Wholesale revenues decreased by 17.1 percent to 91.7 million euros, and retail sales fell by 10.8 percent to 42 million euros. Royalties also diminished by 6.2 percent to 5 million euros.
Considerable capital expenditure investments in the period amounted to 1.8 million euros, primarily catering to third party assets and software purchases. Moreover, debt stood at 135.2 million euros, lowered from 152.5 million euros at the end of December, excluding the impact of the IFRS 16 effect.