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MILAN — The impact of the COVID-19 pandemic hurt Salvatore Ferragamo’s bottom line and revenues in 2020, but the Florence-based company is seeing improvements, reporting a positive performance of the brand’s stores in the first nine weeks of 2021, topped by solid growth in China and Korea and an 85.6 percent gain in the digital channel.
Despite the measures taken to contain costs and the effects of the lockdowns around the world, Ferragamo posted a net loss of 72 million euros in 2020, compared with a profit of 87 million euros in the previous year.
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In the 12 months ended Dec. 31, revenues fell 33.5 percent to 916 million euros, compared with 1.37 billion euros in 2020. Ferragamo reported a progressive improvement in the second half.
In 2020, earnings before interest, taxes, depreciation and amortization tumbled 52.6 percent to 159 million euros, compared with 336 million euros a year earlier.
During a call with analysts on Tuesday at the end of trading in Milan, where the company is publicly listed, executive vice chairman Michele Norsa admitted 2020 had “not been an easy year,” having joined the company at the end of May. He said he had been “working very hard” with chief executive officer Micaela le Divelec Lemmi and chief financial officer Alessandro Corsi, who were both also on the call, and the team, focusing on selective cost reductions, the streamlining of the organization and securing long-term financing. “We have been reasonably successful, seeing in the second part of the year relevant deleverage and a positive EBIT [earnings before interest and taxes],” said Norsa.
In 2020, adjusted operating loss, net of the negative cost component of the impairment test, amounted to 27 million euros, compared with an operating profit of 150 million euros in 2019. In the last quarter, the adjusted operating profit totaled 34 million euros, compared with 44 million euros in the last quarter of 2019.
The executive pointed to a leaner organization; efforts including requalifying revenues in the markets with the highest potential, pushing on channels and products and the importance of China and Asia, which are “driving” business; focusing on bags and leather goods, and “regaining our shoes leadership.”
— Beutee (@BeuteeS) March 10, 2021