In the first quarter of 2023, Italian fashion group Aeffe reported a decline in revenue and margin slump. The company’s consolidated revenue reached €93.2 million, marking an 8.4% decrease at constant exchange rates compared to the previous year. Additionally, the adjusted consolidated EBITDA was €12.3 million, accounting for 13.2% of revenue, down from €20.4 million in 2022.

Massimo Ferretti, the executive president of Aeffe Spa, attributed these Q1 results to the strategic reorganization plan implemented by the company in 2022. However, he expressed confidence that these efforts would yield positive results in the medium term. Ferretti specifically highlighted the impact of streamlining the Moschino brand’s lines and gaining direct control of its distribution in China on the first quarter’s results. He believes that these moves will contribute to the growth and development of both the brand and the group. Ferretti also emphasized the successful performance of brands like Alberta Ferretti, Philosophy by Lorenzo Serafini, and Pollini, as well as the strong growth of the Moschino retail network in Asia. These factors contribute to the group’s positive outlook for future consolidation and growth opportunities, starting in 2024.

The ready-to-wear division of Aeffe experienced a revenue decline of 14% at constant exchange rates, amounting to €58.3 million compared to 2022. However, the footwear and leather goods division’s revenue remained steady at €46.1 million, the same as the previous year.

When analyzing regional sales, Italy accounted for 45.9% of Aeffe’s total revenue, with sales reaching €42.7 million, showing stability compared to 2022. Within Italy, the wholesale channel experienced a 4% decline in sales, while retail sales witnessed a significant increase of 35%.

In terms of sales in the rest of Europe, which accounted for 29.4% of the total, there was a decrease of 13.1% to reach €27.4 million. This decline can be attributed to the temporary closure of Moschino’s London store for renovation, which was completed in March 2023. Sales in the USA, representing 5.9% of total revenue, experienced a significant slump of 45.1%. However, revenue in Asia and the rest of the world remained stable compared to 2022, totaling €17.5 million, or 18.8% of the total.

Overall, the wholesale channel generated 71.8% of Aeffe’s total revenue, amounting to €66.9 million, indicating a decline of 14.5%. On the other hand, retail revenue, accounting for 25.7% of the total, experienced a significant increase of 22.5%, reaching €23.9 million. The most notable retail performance was observed in Asia, with a remarkable 91% increase, primarily driven by changes in the distribution model in China. Finally, royalty revenue decreased by 39.9% compared to the same period in 2022.

Despite the revenue and margin slump in the first quarter of 2023, Aeffe remains optimistic about its future prospects. The strategic reorganization plan, coupled with the growth achieved by key brands and their positive performance in the Asian market, positions the company for consolidation and growth starting from 2024 onwards.

Useful links:

1. Aeffe official website
2. Business of Fashion