Italian fashion group Aeffe has seen a significant boost in profits in the latter part of 2021, surpassing its performance in 2019. The company generated €250 million in revenue between January and September 2021, a 21% increase compared to the same period in 2020 when the fashion industry was heavily impacted by the Covid-19 pandemic. However, the figure was still 7% below Aeffe’s pre-pandemic levels in 2019, primarily due to the group’s reliance on Europe and Italy, where the absence of wealthy tourists is still noticeable.

Despite these challenges, Aeffe has managed to return to profitability through its licensed labels, such as Jeremy Scott, and its own brands, including Alberta Ferretti, Philosophy, Moschino, and footwear label Pollini. The company has transformed its net loss of €14 million in the first nine months of 2020 into a net income of €23.2 million a year later, representing a 74% increase compared to pre-pandemic levels.

During the same period, Aeffe’s EBITDA (earnings before interest, taxes, depreciation, and amortization) grew from €8 million in 2020 to €36.2 million in 2021, while EBIT (earnings before interest and taxes) improved from a loss of €12.5 million to a profit of €17.5 million as of September 30, 2021. These positive results can be attributed to increased sales and cost-saving measures implemented in terms of labor costs, rents, and general overheads.

While Aeffe experienced double-digit growth in all its markets over the first nine months of 2020, the company still faces challenges in reaching 2019 levels, particularly in Asia where sales have declined by 25% over two years, and in Italy where they dropped by 18%. However, sales have shown significant growth in the rest of Europe, despite limited tourist flows, increasing by 29.3% to €80.7 million. This has caused Europe’s revenue share to rise from 23% to 32% in the past two years. In America, a relatively small market for Aeffe at €16.5 million, sales have grown by 17.7% and by 46% compared to 2020.

Moschino, Aeffe’s leading label following the company’s recent acquisition of the remaining 30% stake, continues to be vital in driving revenue for the group. Moschino accounted for 80% of the company’s total revenue, up from 74% in 2019. It generated €199.9 million in revenue in the first nine months of 2021, representing a slight increase of 0.2% compared to two years ago.

As of September 30, 2021, Aeffe operated a total of 201 stores, consisting of 57 directly run monobrand stores and 141 franchised ones, which was slightly fewer than the previous year. Direct retail contributed to 20% of the group’s revenue, down from 27% in 2019, with sales reaching €50.8 million. This marks a 1.5% increase at constant exchange rates compared to the previous year but a 29% decrease over the past two years. Sales in the wholesale channel, which represents 76% of the group’s total revenue, grew by 27.5% compared to 2020, reaching €189.4 million and surpassing the result of the first nine months of 2019 by 1%.

Useful Links:
1. Business of Fashion: Italian Fashion Group Aeffe Sees Profits Surge Past 2019 Levels
2. Reuters: Fashion Group Aeffe Profit Surges Past 2019 Levels