Salvatore Ferragamo booked a 19.6 percent rise in footwear sales in 2012 to €506.2 million. On a currency-neutral basis, shoe sales were up by 15.9 percent. But like the group's overall top line, footwear sales slowed down in the fourth quarter compared with the first nine months of the year.
Sales of leathergoods and handbags, the group's second-largest product line, rose by 16.4 percent to €359.8 million. Shoes and leathergoods increased their combined share of group sales to 75.1 percent from 74.2 percent a year earlier.
Overall group sales increased by 16.9 percent to €1.153 billion in the full year, with Europe performing strongly thanks to buying by tourists. At constant currencies, the growth reached 13.4 percent.
Total European sales were up by 21.4 percent €289.4 million. On a currency-neutral basis, European sales went up by 20.4 percent. North American sales grew by 16.1 percent to €256.9 million, but at constant currency rates, the increase was limited to 15.2 percent.
Japan rose by 5.0 percent to €134.2 million thanks to the strengthening of the yen. At constant exchange rates, sales dropped by 2.1 percent. Asia-Pacific sales, excluding Japan, were up by 17.5 percent to €420.3 million thanks to a 20.0 percent increase in sales by directly operated stores (DOS). On a currency-neutral basis, revenues were up by 12.4 percent. Revenues in Latin America increased by 26.5 percent to €52.0 million, rising by 23.4 percent in local currencies.
By channel, retail sales rose by 14.4 percent to €753.3 million, lifted by new store openings as well as organic growth. At constant exchange rates, the rate of increase was 10.4 percent. Same-store sales grew by 8.0 percent in the full year. Comparable store growth reached 7.8 percent in the last quarter, in line with the third quarter. At the end of December, Salvatore Ferragamo had 338 DOS compared with 323 at the end of 2011.
In the meantime, wholesale revenues increased by 21.6 percent to €380.7 million. At constant currency rates, they rose by 19.3 percent. These revenues include those coming from sales to 268 mono-brand stores managed by third parties.
Ferragamo is scheduled to release its final full-year results on March 21. Financial analysts expect the company to announce a gross operating profit (Ebitda) of nearly €220 million and a net profit of more than €95 million for the financial year.
LVMH grows more slowly
Louis Vuitton continued to grow at a double-digit rate through the end of 2012, but the fashion and leathergoods division of LVMH reported an increase of only 6 percent in the its operating profit to €3.3 billion for the past financial year. The operating margin remained high, considering that the division had a turnover of €9.9 billion for the year, 14 percent more than in 2011.
However, all the other divisions of the big French luxury goods group reported double-digit increases in their operating results for 2012. Furthermore, the revenues of the fashion and leathergoods division grew by only 5 percent in the third and fourth quarters of the year on an organic basis, reducing the growth for the full year to 7 percent.
All in all, LVMH's operating income grew by 13 percent to €5.9 billion on a comparable basis, leading the group to post a 12 percent increase in net profit to €3.4 billion. As previously reported, the group's total sales increased by 19 percent to €28.1 billion, but on a comparable basis they were up by only 9 percent. The group had recorded organic growth of 14 percent in 2011. The 19 percent increase reported for 2012 was largely due to the acquisition of Bulgari.
Christian Dior Couture's sales grew by 24 percent to €1.24 billion, with a 17 percent increase on a currency-neutral basis. Adding those of LVMH, the Christian Dior holding company saw its revenues increase by 19 percent to €29.3 billion, or by 9.5 percent on a comparable basis.
The group's sales in Asia, which had grown by only 2.5 percent year-on-year in the third quarter, accelerated to an annual rate of 8 percent in the fourth quarter. Bernard Arnault, president and chief executive of LVMH, admitted that the Chinese market had slowed down in the second half of the year, but pointed out that a bigger slowdown had taken place during the third quarter in peripheral areas such as Hong Kong, Macau and Singapore.
Arnault said that Louis Vuitton continued to deliver exceptionally high profits and that it developed strongly in the U.S., while improving nicely in Europe and in emerging markets. He said that the group will emphasize the high and selective positioning of Louis Vuitton, giving more preference than before to its leather products.
About Berluti, which is run by his son Antoine, Arnault said the brand has the potential to become profitable within three years and to reach an annual turnover of several million euros. As previously reported, LVMH is making massive investments on Berluti to turn it into an all-encompassing high-brand of fashionable products for men.
Arnault expressed confidence about the progress of the global economy in 2013, but indicated that the group may suffer a loss of competitiveness because of a likely appreciation of the euro against other currencies.