Tod’s Plans to Bring Back Sales After a Year of Slumps

MILAN Hurt by its wholesale channel and a lackluster performance of its core footwear category, sales at Tod’s SpA fell 4.7 percent to 722.2 million euros ($836.7 million) in the first nine months of the year, compared with 757.7 million euros in the same period last year.

“The results are partially affected by some unexpected late deliveries, and by some weakness in the wholesale channel, that in certain markets suggested a prudent approach due to its financial troubles,” said chairman and CEO Diego Della Valle. “Our group is totally focused on executing the previously defined new business model, and we deem the strategy chosen for the future development of our brands right and coherent.

“Key points to the success of our plan are both the awareness of consumers, more and more innovation/creativity-oriented and the new channels of communication and distribution needed to capture their interest. We are growing our web and e-commerce presence very fast, and we are developing our ‘stores of the future,’ ready to embrace all the new distribution channels, without leaving behind the exaltation of the excellence, the quality and the style, which are unique elements of our products. For the current year, we are confident to deliver results in line with market expectations.”

Sales of the Tod’s brand were down 7.4 percent to 388.6 million euros. Hogan sales decreased 8.8 percent to 156.8 million euros due to weakness in the Italian market, mainly in the wholesale channel.

Roger Vivier offered a bright spot, as revenues increased 9.6 percent to 131.3 million euros despite a slowdown in the U.S, dented by a sharp drop of traffic in stores. Fay was down 1.7 percent to 44.8 million euros. In September, Fay revealed it had tapped Arthur Arbesser as its new creative director, succeeding Tommaso Aquilano and Roberto Rimondi, who left the company last July after almost six years at the helm of the outerwear label.

Revenues of the core footwear category were down 4.9 percent to 573.7 million euros “due to the prudent attitude taken toward the wholesale channel and to a different timing of deliveries,” the company said in a statement released after the end of trading in Milan, where the group is publicly listed.

Tod’s Gommino driving shoes in leather.
CREDIT: Courtesy of Brand

Sales of leather goods and accessories saw a 3.8 percent decrease to 99.8 million euros, and apparel posted a 3.2 percent drop to 47.9 million euros, reflecting Fay’s performance.

Revenues in Italy decreased 6.7 percent to 227.6 million euros. In the rest of Europe, sales totaled 182.9 million euros, down 2.9 percent, lifted by the retail network but hurt by a weaker wholesale channel.

In the Americas, revenues plunged 17 percent to 57.6 million euros due to low traffic in the stores and difficulties faced by major department stores.

The group’s revenues in Greater China were up 1.4 percent to 155.1 million euros. Mainland China showed positive results, but Hong Kong was still negative, confirming timid signs of improvement registered in the last few months, the company said.

Finally, in the “rest of the world” area, sales decreased 4 percent to 99 million euros. Japan was positive, while the sales performance in Korea was still negative.

Sales through directly operated stores inched down 0.9 percent to 449.3 million euros. As of Sept. 30, the group comprised 272 directly operated stores and 114 franchised units, compared with 266 directly operated stores and 103 franchised stores at the end of September last year.

Revenues to third parties totaled 272.9 million euros, down 10.3 percent.

It was also announced on Monday that Umberto Macchi di Cellere, previously managing director of worldwide sales for all product categories for the Bulgari brand, will join the group as managing director, succeeding current CEO Stefano Sincini, who is leaving after 33 years with the company.

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