Ferragamo, the renowned Italian fashion brand known for its high-end leather goods, has faced a significant setback in sales during the second quarter of 2020. The global lockdown measures imposed in response to the Covid-19 pandemic have heavily impacted the company’s sales, resulting in a staggering decline of 60%.

In the first half of the year, Ferragamo reported sales of €377 million (£343 million), which marked a decrease of over 30% in just the first quarter alone. This figure fell below the estimated revenue of around €386 million for the same period, as projected by Refinitiv.

The timing of the coronavirus crisis could not have been worse for Ferragamo, as Chief Executive Micaela Le Divelec was leading a brand relaunch. The company had only recently experienced a return to sales growth in 2019, after a downturn since 2015. However, in May, former CEO Michele Norsa was brought back as executive vice chairman to assist in navigating the challenges posed by the pandemic.

Despite the significant decline in sales, Ferragamo has not provided a specific forecast for the rest of the year. However, the company did highlight a positive trend in sales during July compared to the previous quarter across all its markets. It was also noted that the group had witnessed solid growth in directly operated stores in Mainland China, Korea, and Japan in July 2020 compared to the same period last year.

To address the impact of the health emergency, Ferragamo made the decision to postpone the release of all remaining first-half data and an analyst conference call. These updates will now be revealed on September 15, allowing the company to demonstrate the measures taken to cope with the aftermath of the pandemic.

The fashion industry has been severely affected by the Covid-19 crisis, with lockdowns and travel restrictions having a significant impact on global sales and consumer behavior. Ferragamo’s experience mirrors the challenges faced by luxury brands in particular, as they heavily rely on tourism and travel retail for sales.

It remains uncertain how Ferragamo, and the fashion industry as a whole, will recover from the repercussions of the pandemic. However, the company’s focus on key Asian markets and its brand relaunch under the guidance of Micaela Le Divelec provide a glimmer of hope for the future. By adapting to the changing consumer landscape and implementing effective strategies, Ferragamo aims to regain momentum and successfully overcome the challenges posed by the ongoing crisis.

Useful Links:
1. Reuters: Ferragamo Reports 60% Drop in Sales
2. Business of Fashion: Ferragamo Reports Strong Sales Growth in Asian Markets