Despite the Losses, the Brand’s DTC Channel Is Seeing Promising Growth
The full-year revenues of Salvatore Ferragamo Group were impacted by decreasing consumer confidence in Asia-Pacific and a negative wholesale trend. The Italian luxury goods company saw its revenues slip by 10.5% to 1.04 billion euros in the 12 months ending on Dec. 31, 2024, according to preliminary figures released recently. This loss marked an 8.2% decrease at constant exchange rates.
Despite this setback, Salvatore Ferragamo CEO and General Manager, Marco Gobbetti, suggested a hopeful outlook for 2025. Gobbetti stated, “January shows an acceleration in our DTC channel’s growth, albeit supported by the different timing of the Chinese New Year and a favorable comparison base versus last year.” He acknowledged the fourth quarter of 2024 as being a “challenging year” marked by a luxury slowdown and other macro challenges.
The Group’s preliminary sales in the fourth quarter posted a 6.7% decrease to 291 million euros. Gobbetti noted that declines were led by the Asia Pacific market, which slipped by 19.7% to 291.4 million euros due to delivery timing issues, volatile direct-to-consumer trends, and negative wholesale sales.
In 2024, the wholesale channel slumped by 21.2% to 232.6 million euros, while DTC sales fell by 5.8% to 776.7 million euros. Positive performances were noted in certain markets such as Europe, U.S., Japan, and Latin America, despite the overall slowdown. Gobbetti attributed the success in DTC sales to popular products like the Hug bag and Zina ballet shoe.
Gobbetti shared, “The trend of DTC in Asia-Pacific, albeit showing a modest improvement versus the previous quarter, remained weak, as did wholesale and travel retail.” he added, “Nevertheless, through Q4 we saw encouraging results in our DTC business which was overall in line with last year, with good momentum in our primary DTC channels in Europe and the Americas.”
Gobbetti continued to explain the strategies adopted in 2024, which included building brand awareness through impactful communication initiatives and enhancing the digital channel performances. He stated, “We are pleased with the foundations we have built and, whilst we remain conscious of the persisting complex market context, we are encouraged by the trends we identified at the end of the year.”