Diego Della Valle, Chairman and CEO of the Group, commented: “Half-year results reflect the temporary effect of higher than expected investments we have decided to do to support our Brands  visibility, in a fiercely competitive landscape, where the leading global Brands are increasingly prioritizing leather goods and, even more, footwear. Our products represent at the highest level the world of both high quality and Italian style, and this is why our loyal customers follow us and are fond of our brands. The real challenge for us is now to become even more attractive for the young customers who live in the new markets, which are currently the major spenders on fashion and luxury goods. To do this quickly, we need to increase our investments to be more attractive and visible. This will bring us the turnover that we need to have an adequate and more than satisfactory profitability".

Consolidated sales reached 454.6 million euros in the first six months of the year, down by 4.7% from similar period in 2018. In the current year, currency fluctuations gave a positive contribution, particularly to the Tod’s and Roger Vivier brands, which have the greatest presence abroad. At constant exchange rates (using the average exchange rates of the first six months of 2018) sales would have been 449.8 million euros. 

Brand

Tod’s sales totalled 231.2 million euros in the first half of 2019 with positive results from the retail channel. Revenue of Roger Vivier totalled 101million euros, up by 11.6% from the first six months in 2018. All the regions posted positive results, with the exception of the US. Hogan sales totalled 100.5 million euros; the decrease mainly driven by the weakness of the Italian market. The brand registered positive results abroad, and a double-digit growth in China. Finally, sales of Fay were 21.5 million euros; the decrease, as compared to similar period in 2018, is entirely due to the weakness of the wholesale channel.

Product Category

Revenue from shoes were 367.8 million euros in the first half of 2019; the decrease, as compared to the same period of 2018, is mainly due to the wholesale channel. Sales of leather goods and accessories totalled 62.3 million euros. The improvement registered in the second quarter confirms the strong results of the new families of the Tod’s brand. Finally, sales of apparel were 24.1 million euros; the performance broadly reflects the trend registered by the Fay brand.

Region

In the first half of 2019, domestic sales totalled 125.2 million euros; the decrease, compared to the same period of 2018, is entirely due to the weakness of the wholesale channel, while the results in the retail channel are positive. In the rest of Europe, the group’s revenue totalled 115.3 million euros; also in this region, the performances are divergent in the two distribution channels. In the Americas sales amounted to 34 million euros, down by 7% from similar period in  2018, reflecting a significant slowdown in demand. The group’s sales in Greater China totalled 111.6 million euros, up by 2.3% from half one in 2018. Positive results in mainland China, which represents more than 60% of this region, with an acceleration of the growth in the second quarter, despite the price cuts made in April to reflect the reduction in duties. On the contrary, the performance in Hong Kong worsened, due to the known political tensions. Finally, in the area Rest of the World, the group’s revenue were 68.5 million euros, slightly higher than half one in 2018. The DOS channel grew, with particularly strong results in Japan and in Korea.

In the first half of 2019, retail revenue totalled 319.2 million euros and represented roughly 70% of total turnover. The 6.5% growth, as compared to similar period of 2018, was driven by the sound double-digit growth of e-commerce (included in the retail channel starting from the 1st of October 2018 with the acquisition of Italiantouch). The contribution of the new openings is also positive, while the organic growth figure remains negative. The Same Store Sales Growth (SSSG) rate, calculated at constant exchange rates as the worldwide average of sales growth rates registered by the DOS network, is -4.5% in the first half of the year (from the 1^st of January to the 30^th of June 2019). At reported rates, the value is more than 100 bps higher. As of the 30^th of June, Tod's distribution network was composed by 288 DOS and 114 franchised stores, compared to 285 DOS and 122 franchised stores in 2018. Revenue to third parties totalled 135.4 million euros; net of the impact of the acquisition of Italiantouch and the conversion into DOS of the Australian franchised stores, the weakness of the channel remains, especially in the domestic and European markets.