The Aeffe Group, an Italian fashion conglomerate known for its ownership of prestigious brands such as Alberta Ferretti, Philosophy by Lorenzo Serafini, Moschino, and Pollini, has taken a severe hit from the global crisis stemming from the Covid-19 pandemic. In the first quarter of 2020, Aeffe’s revenue plummeted by 25.4% to €76.2 million compared to the same period last year. This decline was observed both at current exchange rates and constant rates.

The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) also experienced a significant drop, falling by 67.7% to €8.6 million. Net income was particularly affected, plunging to a mere €4,000, a stark contrast from the nearly €12 million generated in the previous year. The ready-to-wear division of Aeffe suffered the most, with a 30% reduction in revenue amounting to €54.4 million. However, the footwear and leather goods division managed to limit its decline to single digits, experiencing a 7.9% decrease in revenue, totaling €30.7 million.

Despite the challenging circumstances, Aeffe remains cautiously optimistic about its Fall/Winter 2020-21 commercial campaign, as it only experienced a 6.5% decrease in sales compared to the previous season. Aeffe considers this performance to be relatively positive given the critical state of the global economy. Naturally, all of Aeffe’s regional results were negative, with revenue in Italy, which accounts for 47.8% of the total, experiencing a 21% decrease to €36.5 million. The rest of Europe, which contributes 27.2% to the total revenue, witnessed a 10.7% decline, while Russia, the UK, and Germany fared relatively well.

In the Asian and other international markets, Aeffe generated €15.4 million in revenue, representing 20.3% of the total but marking a significant decline of 44.2%. The Greater China region suffered the most, with a 42% drop in revenue during the first quarter. Nevertheless, recent sales data indicates positive signs and a noticeable increase in store footfall in the region. Sales in America, comprising 4.7% of the total revenue, experienced a significant decrease of 31.4%.

In terms of distribution channels, Aeffe’s wholesale channel, which makes up 72.9% of total revenue, experienced a 26.6% decline. The direct retail channel, which accounts for 23.5% of total revenue, also suffered a loss of 23.2%. However, the e-tail channel saw satisfactory results. Additionally, royalty revenue decreased by 16.1% compared to the first quarter of 2019, contributing to 3.6% of Aeffe’s consolidated revenue.

Useful links:
Aeffe official website
Reuters article on Aeffe’s financial results