Tod’s annual turnover declines for second year in succession; group sales down 2.6% in 2019
Tod’s said that preliminary sales figures showed that group revenue fell by 2.6% in 2019 to €916.1 million, pushed down by weaker business in both Italy and the rest of Europe. A year earlier, Tod’s revenues fell 3% globally, again led by deteriorating sales in Italy and the rest of Europe.
Moreover, breaking down revenues into the group’s four key marques, the Tod’s brand suffered a 7.4% decline in sales to €461.8 million, nearly €37 million less than in 2018. The one bright spark was high-end shoemaker Roger Vivier, which grew by 15.6% to €200.6 million. The group’s other Italian shoe label Hogan also saw sales head south, falling 4.7% to €196.5 million. Finally, casual clothing label Fay nose-dived 8.2% to €56.3 million, in the worst performance of the group.
Though one of Italy’s most prestigious marques, Tod’s business has slowed in the past few years, as the brand has lost heat, and gained only moderate traction with millennials.
In response, its CEO and controlling shareholder Diego Della Valle has actively tried to inject more creative input, launching a highly mediatic project: Tod’s Factory – named after Andy Warhol’s famed 60s studio – which develops capsule collections with fashion stars like Alber Elbaz, Alessandro Dell’Acqua and, just announced in the past 24 hours, with hipster Japanese label Mame Kurogouchi.
“We are starting to register the first positive signs of the strategy adopted... We consider it an absolute priority to protect the great quality of our products, the refined Italian lifestyle and, increasingly, the creative component, that attracts new consumers, who love to surround themselves with special things,” said Della Valle in a release.
“The competition in the luxury sector is getting stronger, and therefore, we must be able to always have special and desirable products. The arrival of the new Creative Director of the Tod's brand, which will coordinate the work of the style office, will serve to emphasize these codes,” added the CEO.
Last month, Tod’s revealed the first menswear ideas of its newly appointed creative director Walter Chiapponi, who will make his full womenswear debut during the Milan runway season in late February.
Tod’s did also enjoy a “healthy start” to its new T Timeless project for shoes and leather goods, as one of Della Valle’s initiatives gained traction.
“Our goal is to quickly create an Omni-channel group model, which allows us to sell products through our direct distribution, the best e-tailers and our department store partners. The contribution of classic wholesale will be less and less important for us and we are prudently trying to decrease it. Even if this strategy will temporarily reduce the turnover, we believe it is the right thing to do, in order to be able to completely control the distribution policy of our group, worldwide,” said Della Vale.
By region, Italy and Europe, accounted for almost 60% of turnover, even as Italy was pained by a 7.6% decline in sales, down €21.5 million in one year to €260.7 million. Only China enjoyed real gains – rising 2.3% to €215.1 million, despite the negative effect regarding the Hong Kong market.
The group ended 2019 with a retail network of 290 Directly Operated Stores (DOS) and 115 franchised stores; meaning six more DOS and five less franchised stores compared to one year earlier.
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