Footwear sales at Tod’s rose by 21.5 percent to €81.9 million for the 3rd quarter ended Sept. 30, as compared to the same period a year ago, confirming the Italian luxury group’s sales recovery in the most important segment of its business, which represented 59.7 percent of its total turnover in the quarter.
Over the first nine months of 2004, footwear sales were up by 15.1 percent to €214.1 million. They increased by 16.9 percent in terms of local currencies, but sales of leathergoods and other accessories rose at a faster rate of 26.7 percent, representing 18.7 percent of sales. Sales of clothing, mainly under the Fay brand name, grew by only 9.9 percent.
The Italian group’s total sales rose by 21.3 percent in the latest quarter to €137.1 million. Total sales for the nine months reached €331.6 million – up by 15.8 percent in euros and by 17.6 percent in constant currencies, generating net income of €22,949,000, up slightly from €22,906,000 in the same period a year ago. Operating margins dropped slightly to 21.0 percent from 21.5 percent before amortization and depreciation, due in part to the strong euro, and from 13.1 to 12.7 percent after amortization and depreciation.
Sales in local currencies increased by 17.5 percent for the Tod’s brand and at a stronger rate of 19.4 percent for Hogan.during the first nine months of 2004. Viewed regionally, Italy – the group’s domestic market – brought in €73.6 million in the quarter, up from €59.2 million, accounting for 53.7 percent of sales. The rest of Europe brought in €38.0 million, up from €31.3 million; North America brought in €13.1 million, up from €14.0 million, while Asia and the rest of the world brought in €12.4 million, up from €8.5 million.
Over the entire 9-month period, sales increased by 15.0 percent in Italy to €162.8 million and by 14.0 percent in the rest of Europe to €94.2 million. In North America, revenues increased by 6 percent in dollars by fell by 4.0 percent when converted to euros. Asia and the rest of the world registered the biggest growth, with a 67.8 percent increase at constant rates and a 61.7 percent gain in euros to €36.6 million.
Tod’s plans to open its first free-standing store in Tokyo in December. Located in the Omotesando area of the city, the 3-level flagship unit will have a sales area of over 600 square meters. Through the opening, the group hopes to strengthen its image in Japan and in other parts of the Far East.
In terms of distribution channels, directly owned stores (DOS) generated €50.1 million in sales during the 3rd quarter, up from €41.2 million in the year-ago period. They grew by 28.6 percent at constant rates over the 9-month period, partially driven by 11 new store openings, and the company’s stores recorded a nice 10.3 percent sales increase on a same-store basis for the first 10 months of 2004. In terms of euros, sales through the DOS increased by 25.5 percent to €153.8 million, while sales to franchisees and other parties increased by only 8.5 percent to €177.8 million.
The group had a total of 104 directly operated stores and 29 franchises around the world as of Sept. 30. During the 3rd quarter, the group opened two Dev stores, which carry all its three brands, in Verona and Bolzano, Italy. It also started up a Tod’s store in Milan’s Galleria Vittorio Emanuele and a shop-in-shop in Osaka, Japan. During the month of October, two franchised Tod’s stores were opened in Bangkok and in Beijing, the latter being the group’s second Chinese store after Shanghai.