Tod’s is seeing signs of recovery in Japan and South Korea on top of the strong growth already enjoyed in China. But the company warned that to meet market expectations, it would need some “respite” in store closures in the fourth quarter. Financial analysts anticipate full-year sales of €647 million. But in the meantime, many European countries, including Italy, have reintroduced Covid-19 related lockdowns.
China is currently the main market underpinning the sales of the Italian fashion company. In the third quarter, sales in the country were up by a “solid” doubled-digit growth rate, resulting in an overall topline for the company of €195.7 million, down by 12.3 percent year-on-year but marking a significant improvement compared with the previous two quarters and nearly 20 percent higher than expected by analysts. Tod’s noted that the strong performance in China continued in October.
In the first nine months of the year, Tod’s posted global revenues of €452.6 million, down by 33.2 percent on a reported basis and by 33.0 percent at constant currency rates.
For the Tod’s brand, sales were down by 38.6 percent to €211.3 million, with currency-neutral revenues dropping by 38.5 percent. Hogan contracted by 27.4 percent to €109.1million, with same-currency sales down by 27.3 percent. Roger Vivier decreased by 26.0 percent to €106.6 million, or by 25.6 percent in local currencies
By product category, footwear sales were down by 31.7 percent in the nine-month period to €371.1 million, with constant currency sales down by 31.5 percent. Meanwhile, leathergoods and accessories fell by 43.4 percent, both at current and constant currency rates, to €51.8 million.
In Italy, revenues declined by 36.6 percent to €123.9 million. Sales in the rest of Europe were down by 34.7 percent to €115.1 million, with constant currency revenues down by 35.0 percent.
In the Americas, revenues fell by 48.2 percent to €25.9 million. The decline widened slightly to 48.6 percent in local currencies. In Greater China, revenues were €124.8 million, down by 20.2 percent on a reported basis and by 19.4 percent in local currencies. Sales in the rest of the world decreased by 36.9 percent to €62.9 million and slipped by 36.3 percent in local currencies.
Sales through directly-operated stores (DOS) and the proprietary e-commerce platform contracted by 34.8 percent to €304.2 million, with local-currency sales down by 34.4 percent. The company reported an “excellent performance” in digital sales, which recorded a progressive acceleration and grew at solid double figures in the entire nine-month period. ”This is a priority channel for us, in which we are continuing to invest heavily; we are expanding the customer base, also thanks to new digital forms of communication,” said Diego Della Valle, the company’s chairman and chief executive.
Sales to franchisees and wholesale accounts totaled €148.4 million, down by 29.7 percent on a reported basis and by 29.9 percent at constant exchange rates. The group had 296 DOS and 109 franchised stores at the end of September against 290 DOS and 111 franchises a year earlier.
Tod’s stressed that it has “very limited visibility” regarding the future and is applying “strong attention to cost control” and “great prudence in the collection of wholesale orders.” It expects its cost base in 2021 will be lower than in 2020.