Failures in the first half forced Tod's to change strategy
In the first six months of 2016, the profit of the Italian luxury brand Tod's decreased by 25,6%, to 37,4 million euros or $ 41,8 million from 50,3 million euros or $ 58,8 million in the same period last year.
Group sales decreased by 3,4% to 497,6 million euros or $ 557,3 million compared to 515,3 million euros or $ 603 million for the same period last year. In the absence of currency fluctuations, a drop in brand sales could amount to 4,3%.
“The results of the company's sales were influenced by the situation in the industry and economic instability in the sales markets,” said the head and CEO of the company Diego Della Valle. The declining profitability of the business has been partially offset by policies to cut costs and streamline local businesses, which are expected to bring results to Tod's in the coming months.
“In the future we plan to focus on the production of high-quality products, shoes, bags, leather goods, the emphasis will be on the core values of our brand that have made it famous all over the world, this is craftsmanship, Italian style and innovation. To achieve these goals, we have invited to our team professionals with knowledge in the field of style, marketing and management. We plan to strengthen communication with the consumer, and for this we will actively use digital technologies, ”said Diego Della Valle.
From January to September 14, the group closed nine flagship stores.
The company's chief financial officer, Emilio Masellari, commented that the store closures do not mean the company's strategy to close down retail, and some unprofitable stores in Hong Kong have come under the knife. He added that the number of new discoveries in 2017 will be limited. Although the number of store openings and closings will be approximately the same. In general, the company will focus primarily on organic growth and management of the existing distribution system.
For the six months of 2016, sales of the main shoe category of the group decreased by 2,5% to 400,3 million euros or $ 448,3 million sales of leather goods and accessories decreased by 10,7% to 69,3 million euros or $ 77,6 million. At the same time, sales of clothing increased by 3,7% up to 27,3 million euros or $ 30,5 million
Masellari hopes that a new collection of bags, released in October, will help improve the leather goods category by the end of this year.
At the same time, during Milan Haute Couture Week, Tod's plans to confine itself to the presentation of a new collection, and is not going to organize a large-scale fashion show, as was customary under the former creative director of the brand Alexandra Facinetti, who left the company in May.
Currently, the company's management believes that when creating and promoting products, Tod's should focus less on fashion and more on efficiency, Masellari said. At the same time, the brand's pricing strategy will not change.
In the first six months of 2016, the profit of the Italian luxury brand Tod's decreased by 25,6%, to 37,4 million euros or $ 41,8 million from 50,3 million euros or $ 58,8 million in the same period ...
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