Italian fashion group Aeffe is still grappling with the financial impact of the pandemic, as its sales and profits continue to decline. Although there was a slight improvement in revenue during the third quarter, thanks to the delivery of Fall/Winter 2020 collections, Aeffe’s sales for the first nine months of the year dropped by 23.2% to €206.7 million. The company’s net loss for the same period was €12.5 million, compared to a net income of €13.2 million in the previous year. Taking into account the effects of the IFRS 16 lease accounting method, the adjusted net loss stood at €7.4 million. Additionally, Aeffe saw an 82% decrease in EBITDA, falling from €46 million to €8.1 million, while adjusted EBITDA reached €12.2 million.

The decline in sales was observed across all of Aeffe’s market segments, brands, regions, and sales channels, except for its most directional labels. Moschino, which accounted for 79% of Aeffe’s total sales, saw a revenue loss of 18%, dropping to €163.3 million. Philosophy by Lorenzo Serafini witnessed a decline of 22.3% in revenue, while footwear brand Pollini experienced a loss of 38%. Alberta Ferretti and the group’s licensing business also suffered revenue decreases of 40.8% and 58.7%, respectively.

On the regional front, Aeffe’s main market, Italy, experienced a decline of 21.8% in sales. The rest of Europe saw a smaller decline of 2.2%, with a recovery in the UK and Germany during the third quarter. Sales in America decreased by 38.2%, and in Asia and the rest of the world, they dropped by 41.7%.

Aeffe currently operates 60 directly owned stores and 148 franchised ones, totaling 208 monobrand stores. This is a decrease from the previous year’s total of 239 stores. Retail sales accounted for 24% of the group’s revenue, experiencing a decline of 29.9%, while the wholesale channel, which contributes to 72% of Aeffe’s revenue, saw a drop of 20.6%.

As Aeffe continues to navigate the challenges posed by the pandemic, it is crucial for the company to adapt and devise strategies to boost sales and mitigate losses in the coming months. With uncertain market conditions persisting, the entire fashion industry must remain resilient and innovative to withstand the ongoing disruptions caused by the global health crisis.

Links:
1. The COVID-19 Impact on Fashion and Luxury Brands
2. Op-ed: Retail Reckoning