Tod´s: lackluster first quarter
The income Tod in the first quarter of 2015 was affected by cost increases in rents and staff new stores.
Earlier this year from Luxonomist lines the expectations deTod’s it was analyzied financial data from 2014. The results in the first quarter of 2015 has not been good, with stagnant sales and falling profitability.
The income of Tod´s in the first quarter of 2015 was affected by cost increases in rents and staff for the new stores. Revenues in the period amounted to EUR 257.7 million (increase of 1.5% over 2014), but its EBITDA was EUR 47 million, falling 17% over the same period.
«The quarter’s results reflect an economic and monetary environment that remains challenging, with continued weakness in some important markets for luxury goods,» said CEO Diego Della Valle, recalling that «the short-term profitability has It has been temporarily affected by the investments made in recent years, but we are confident that we will recover, or may even improve, in a medium term perspective. «
For the 1st quarter of 2015, group accessories and leather goods sales decreased by 10.4% (37 million euros) due to problems with the delivery schedule, according to the company. With a turnover of € 204, 5 million, footwear remained the main part of the improvement of the business, sales increased by 4.3% in the same period.
Rationalization of distribution in the domestic market and focus on the Hogan and Fay brands have begun to give results. In the first three months of the year, sales of these two brands have increased respectively by 3.7% to 68 million euros and 1.6% to 14.2 million.
Tod, flagship brand of the group, meanwhile, saw its sales fall by 0.3% over the same period, with a turnover of € 142 million. Also worth noting the slowdown in the luxury shoe brand Roger Vivier, whose sales increased by 1.5%, compared with an increase of 20% in the 1st quarter of 2014. All markets saw gains except Asia: -4% with a turnover of € 53.9 million as of March 31, the country accounts for 20% of total group sales. Its sales in Italy accounted for 35 % of total group sales, followed by the European market outside Italy and the Asian market.
Big Asian presence.
In regard to this continent, the group revealed that total sales in this region were EUR 53.9 million during the reporting period, a decrease year on year of 15%, and the region contributed 20.9% of group sales . The report also reveals that sales in the stores of Tod´s suffered a large decrease in Hong Kong and Macao. The group said the retail market in Hong Kong was affected by the anti-corruption campaign by the Chinese government. In addition, rental costs in Hong Kong were too high.
Although the result of the group in Hong Kong and Macao saw a decline, sales in mainland China increased during the reporting period. Its sales in mainland China, according to company sources, accounted for half of its sales in Asia. So far, the group Tod has 79 stores in Bigger China, including 67 in mainland China, 11 in Hong Kong and one in Macau. It has 25 franchised stores in this market. In 2015, the group plans to open new stores owned in Chongqing and Zhengzhou, as well as a new franchise store in Sanya.
Church’s (the Prada group) also prevails in Asia.
Exports of this traditional English shoemaker, now account for over a third of its sales, and have been increasing steadily over the last decade. While its largest export market is Sweden, the second largest market in South Korea. Although now owned by Prada, a company of Italian luxury goods, it sold itself as quintessential British manufacturer. Church’s, which sells nearly half of its products through its own stores four Hong Kong, two in Shanghai and one in Singapore and soon open one in Beijing. The prices of their shoes are high and may exceed 1,000 Euros a pair. Production is limited to 20 thousand pairs a month time, creating problems to fully meet demand, so Church’s plans to expand its factory in Northampton.
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