Italian luxury label Salvatore Ferragamo experienced a notable decline in profits for the first half of 2024.
- The operating profit fell by 41% year-on-year, dropping from €47m to €28m.
- Total revenue decreased by 12.8%, heavily influenced by a drop in wholesale revenue.
- Asia Pacific and European markets were particularly challenging, with sales declines of 17% and 16.1% respectively.
- CEO Marco Gobbetti highlighted a focus on enhancing top-line performance and customer engagement.
Italian luxury brand Salvatore Ferragamo has reported a significant reduction in profits for the first half of fiscal 2024. The company’s operating profit declined by 41% year-on-year, falling from €47 million (£40 million) in the same period in 2023 to €28 million (£24 million).
The total revenue for the first half also saw a considerable decrease of 12.8%, amounting to €523 million (£446 million). This decline was primarily due to a 23.1% drop in wholesale revenue, reflecting a widespread demand slowdown.
In the Asia Pacific market, sales plummeted by 17% year-on-year, significantly impacting the overall results. Similarly, the European market reported a decline of 16.1% in sales.
CEO Marco Gobbetti has attributed these financial challenges to the ongoing demand slowdown and noted that the wholesale channel experienced weakness, exacerbated by a more selective distribution strategy. The company intends to address these issues by focusing on top-line performance and striving for improved profitability.
Gobbetti outlined strategic measures to counteract the decline, which include expanding the audience and enhancing engagement through a refreshed product offer and tailored CRM initiatives. Additionally, a full funnel marketing approach and a new store concept are part of the efforts to enrich customer experience.
Salvatore Ferragamo continues to navigate a challenging consumer environment, aiming to bolster its market presence through strategic initiatives.
