Italian luxury goods group Tod’s exceeded analysts’ expectations for its 2019 revenues, driven by a strong performance in the fourth quarter. Despite a 2.6% decline in total sales for the year, Tod’s surpassed the average estimate of 909 million euros. The company has been implementing a new strategy since late 2017 to attract younger consumers, which includes launching more frequent collections, collaborations, and increased marketing investments.

Founder and top shareholder Diego Della Valle expressed optimism about Tod’s performance, stating that the last quarter’s results showed an improvement in revenue despite the challenges faced in the Hong Kong market. He also highlighted that the company’s strategy is starting to yield positive results.

In addition to beating revenue expectations, Tod’s saw a slight improvement in same-store sales, with a 4% decline compared to a 4.7% decline in the first nine months of 2019. This suggests that there may be a turnaround in customer demand for the brand. Despite the political protests causing a “sharp slowdown” in the Hong Kong market, Tod’s recorded a growth of 2.3% in sales in Greater China.

Recognizing the need to adapt its sales strategy, Tod’s announced that it will prioritize its own stores and e-commerce partnerships over wholesale networks. Although this decision may result in a temporary reduction in turnover, Della Valle believes that having complete control over the company’s distribution policy worldwide is essential.

Tod’s strong fourth-quarter performance and strategic initiatives indicate that it is successfully adapting to the changing demands of the luxury goods market. By targeting younger consumers and optimizing its distribution channels, Tod’s is positioning itself for future growth and success.

Sources:
Reuters
Vogue Business