MILAN — Decreasing consumer confidence in Asia-Pacific and a negative trend in the wholesale channel impacted the Salvatore Ferragamo Group’s revenues in the third quarter, denting the overall performance in the first nine months of 2024.
Revenues in the third quarter decreased 9.6 percent to 221 million euros, compared with the same period last year. In the nine months ended Sept. 30, sales fell 11.9 percent to 744 million euros, compared with the same period in 2023.
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“The results of the third quarter have been impacted by the challenging macroeconomic and consumer environment and we expect this trend to continue in the last part of the year,” said Marco Gobbetti, chief executive officer and general manager, signaling that the Asia-Pacific region was “the main phenomenon impacting our sales performance. The secondary channel has also been affected by low traffic, which also continues to impact the wholesale environment.”
In the nine months, sales in the direct-to-consumer channel decreased 7.9 percent to 552.2 million euros.
There are a total of 369 stores globally, compared with 377 at the end of September last year. New stores have opened in Tokyo, Beijing, Seoul and Suzhou.
Sales in the wholesale channel tumbled 21 percent to 171.6 million euros, reflecting weaker than expected demand in the third quarter, especially in the U.S. market, Gobbetti said.
During a call with analysts on Tuesday at the end of trading in Milan, the executive said he expected the wholesale channel to “somewhat settle” in the fourth quarter but that it would be “still slightly negative. The U.S. hopefully will have bottomed out. Travel retail suffered significantly.” He did not express optimism about this channel for the last quarter of the year.
Gobbetti said he was not planning “a significant store rationalization” although he did not exclude “a few changes.”
By category, sales of footwear were down 11.3 percent to 336.1 million euros, and leather goods showed a 10 percent decrease to 293.1 million euros. Apparel fell 20.5 percent to 42.9 million euros.
Starting from Gobbetti’s comments on the positive reaction to the collections designed by creative director Maximilian Davis, one analyst highlighted a disconnect and asked why this was not seen in the numbers and the reasons for a poor performance in the direct-to-consumer channel. The executive responded by saying that he was pleased with the new aesthetic Davis had injected into the brand and the products but said that “it takes time to grow and resonate with a wider public, [the improvement] can’t [come] overnight.” The collections, he continued, are “classic and quite refined and not loud, and we want to achieve a build-up on an elevated customer base.”