Aeffe blames wholesale channel for marginal rise in H1 sales

In the first half of 2019, Aeffe Spa reported consolidated revenues of 173.3 million euros (193.2 million dollars), a 1.3 percent increase at current exchange and 1 percent at constant exchange rates. The company said, revenues of the prêt-à-porter division amounted to 132.2 million euros (147.4 million dollars), up 0.4 percent at current exchange, while revenues of the footwear and leather goods division increased by 4.4 percent to 60.7 million euros (67.6 million dollars).

Commenting on the first half trading, Massimo Ferretti, Executive Chairman of Aeffe Spa, said in a statement: “Encouraged by the good performance of our monobrand stores, the results approved today are influenced by the slowdown in the wholesale channel recorded in the second quarter, penalized by an uncertain macroeconomic situation with consequent impact on margins.”

Review of Aeffe’s performance across geographies

The company added that sales in the Italian market decreased by 1.3 percent to 80.1 million euros (89.3 million dollars) due to the weakness of the wholesale channel, in contrast with the positive performance of retail. The Italian market accounted for 46.2 percent of consolidated sales; that incidence decreased to 34 percent net of the effect of sales to foreign customers on the national territory. At constant exchange rates, sales in Europe, contributing to 22.3 percent of consolidated sales, decreased by 6.5 percent due to the slowdown of the wholesale channel.

In Asia and in the Rest of the World, the group’s sales totalled 45.5 million euros (50.7 million dollars), amounting to 26.3 percent of consolidated sales, with an increase of 14.8 percent at constant exchange , driven by the good trend in Greater China, which posted a 9.7 percent growth. Sales in America, contributing to 5.2 percent of consolidated sales, posted a decrease of 5.5 percent at constant exchange rates, again due to the performance of the wholesale channel.

Aeffe posts decrease in wholesale revenues

By distribution channel, wholesale revenues declined by 2.8 percent at constant exchange and 2.4 percent at current exchange rates, contributing to 69.8 percent of consolidated sales. The company said, this decrease was due to the downturn registered in the second quarter as a result of the AW 2019 sales campaign performance which, completed in the second quarter of the year, reported a 4 percent decrease as a whole.

The sales of directly-operated stores (DOS) increased by 9.2 percent at constant exchange and 9.5 percent at current exchange rates and contributed to 26.6 percent of consolidated sales. Royalty incomes increased by 23.2 percent compared to H1 2018 and represented 3.6 percent of consolidated sales.

The company further said that consolidated EBITDA net of IFRS 16 effect was equal to 18.3 million euros (20.4 million dollars), with an incidence of 10.6 percent of consolidated sales compared to 21 million euros in H1 2018 (12.3 percent of total sales), representing a 2.7 million euros or 12.8 percent decrease. The company said, this change was attributable to both divisions. In H1 2019 EBITDA of the prêt-à-porter division, net of IFRS 16 effect, amounted to 12.3 million euros compared to 14.3 million euros in H1 2018 and EBITDA of the footwear and leather goods division, net of IFRS 16 effect, amounted to 6 million euros compared to a 6.7 million euros in H1 2018, a 0.7 million euros decrease.

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