Tod’s, the renowned luxury Italian brand known for its exceptional shoes and accessories, has announced a decline in its annual turnover for the second year in a row. Preliminary sales figures indicate that the company’s revenue fell by 2.6% in 2019, amounting to €916.1 million. The primary cause of this decrease can be attributed to weaker business performance in Italy and the rest of Europe.
Digging deeper into the revenue numbers, it becomes evident that the Tod’s brand itself experienced a substantial decline of 7.4% in sales, reaching only €461.8 million. This is a staggering €37 million less than the previous year. However, there was a silver lining for the group in the form of Roger Vivier, the high-end shoemaker, which witnessed a remarkable growth of 15.6% in sales, reaching €200.6 million. On the other hand, the group’s other Italian shoe label, Hogan, experienced a decline of 4.7% in sales, totaling €196.5 million. Meanwhile, the casual clothing label Fay had the worst performance, with sales plummeting by 8.2% to €56.3 million.
Despite being a prestigious brand, Tod’s has encountered challenges in recent years, particularly in resonating with the millennial demographic. In response to these difficulties, the CEO and controlling shareholder of Tod’s, Diego Della Valle, has actively sought to inject more creative input into the brand. One notable initiative is the Tod’s Factory project, which collaborates with renowned fashion stars to develop special capsule collections. Notable partnerships include Alber Elbaz, Alessandro Dell’Acqua, and the hipster Japanese label Mame Kurogouchi.
Della Valle firmly emphasizes the significance of preserving the brand’s product quality, Italian craftsmanship, and its increasingly important creative component, which appeals to new consumers seeking unique and special items. In order to further strengthen this focus, Tod’s has appointed a new Creative Director for the Tod’s brand who will oversee the work of the style office.
Just recently, Tod’s unveiled its first menswear ideas under the guidance of the newly appointed creative director, Walter Chiapponi. Chiapponi will make his full debut in the womenswear sector during Milan’s upcoming runway season in late February. Additionally, Tod’s launched the T Timeless project for shoes and leather goods, which has gained traction and positive reception.
Tod’s also aims to transform into an omnichannel group model, allowing the brand to sell its products through various channels such as its direct distribution outlets, e-commerce platforms, and department stores. The focus on direct distribution is part of Tod’s strategy to exercise more control over its global distribution policy. While this strategy may initially impact turnover, Tod’s believes it is the right move to ensure the brand’s long-term success.
In terms of regional performance, Italy and Europe collectively accounted for nearly 60% of Tod’s turnover. However, Italy experienced a decline of 7.6% in sales, resulting in a loss of €21.5 million in just one year. The only region that witnessed real gains was China, with a 2.3% increase in sales, amounting to €215.1 million, despite the negative impact from the Hong Kong market.
As of the end of 2019, Tod’s boasted a retail network consisting of 290 Directly Operated Stores (DOS) and 115 franchised stores. Compared to the previous year, there was an increase of six DOS and a decrease of five franchised stores.
All in all, Tod’s is actively adapting its strategies to navigate the evolving luxury market landscape and attract a broader consumer base. With a renewed focus on creativity, product quality, and distribution control, the brand aims to regain momentum and appeal to new customers in the coming years.