Salvatore Ferragamo Profits Up 30%

Global retail and wholesale growth and gains in footwear and leather goods lifted Salvatore Ferragamo SpA’s net profit 30 percent in 2012 to 106 million euros, or $135.7 million, compared with 81 million euros, or $112.6 million, in the previous year. The Florence-based company also attributed the improvement to a 10 percent reduction in the minority interest last year compared with 2011, as a consequence of the buyback of the stakes in distribution companies in South Korea and Southeast Asia.

Including a minority interest profit of 20 million euros, or $25.6 million, profits rose more than 21 percent to 125 million euros, or $160 million, compared with 103 million euros, or $143.2 million, in 2011.

In the 12 months ended Dec. 31, Ferragamo reported revenues of 1.15 billion euros, or $1.47 billion, up 17 percent compared with 986 million euros, or $1.37 billion, in 2011.

Operating profit climbed 24 percent to 194 million euros, or $248.3 million, compared with 157 million euros, or $218.2 million.

Dollar figures were converted at average exchange rates for the periods to which they refer.

Chief executive officer Michele Norsa said during a conference call with analysts that, in 2012, “luxury has proven again to be very resilient and the top brands even stronger. The name of the game is the ability to capture new consumers not only at home but around the world.”

The Asia-Pacific area remains the group’s core market, accounting for 36.3 percent of total sales and up 17.5 percent compared with the previous year. The retail channel in the region contributed to the growth, showing a 20 percent jump. Lifted by tourists, Europe posted a 21.4 percent sales increase. North America grew 16.1 percent, almost entirely achieved on a like-for-like basis.

Sales rose 5 percent in Japan, supported by a favorable exchange rate, but fell 2 percent in local currency. The Central and South America region was also strong, showing a 26.9 percent increase.

Norsa said that China in the fourth quarter last year “definitely restarted at a very good pace,” and also remarked on the flow of “hundreds of thousands of Chinese tourists around the world” traveling to countries from Canada to Indonesia.


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