Italy’s luxury fashion group Aeffe Spa has reported a substantial shift in its financial landscape for the first nine months of 2024. The company announced a net profit of €35.2 million, approximately $38.7 million, a significant turnaround from a loss of €17.8 million recorded in the same period last year. However, this positive news comes alongside a concerning decline in revenue, which dropped by 17.6 percent year-over-year to €207.8 million.
Despite facing a revenue downturn, Aeffe’s EBITDA surged to €90.9 million, reflecting a remarkable margin of 43.8 percent. The company attributed the overall revenue drop to decreases across all regions, with wholesale being the hardest hit, falling by 20.3 percent. In light of these challenges, Aeffe has embarked on strategic initiatives aimed at reorganizing its brand to navigate the ongoing global consumption slowdowns.
In examining the performance by region, Italy’s turnover reached €89.5 million, showing a 17.1 percent decline compared to last year. The wholesale sector experienced the most significant contraction at 23 percent, while retail outlets saw a milder 7 percent decrease. In the rest of Europe, excluding Italy, turnover plummeted by 18.3 percent to €63.6 million, influenced by specific market conditions and challenges at wholesale and retail levels.
The Asia and Rest of the World segment reported €42.8 million in turnover, a 19.2 percent drop compared to 2023, while the Americas experienced a decrease of 15.3 percent, amounting to €11.9 million. By distribution channel, wholesale represented 66.2 percent of total turnover, which reflected a 20.3 percent decrease, while retail accounted for 30.3 percent and saw a 12.3 percent decrease.
Massimo Ferretti, Aeffe’s executive chairman, acknowledged the difficulties posed by the current global landscape but expressed confidence in the company’s strategic direction. He highlighted the reorganization of the Moschino brand and the rebranding of the Alberta Ferretti label as key initiatives that could usher in new opportunities.
As of September 30, 2024, Aeffe’s financial position revealed net equity of €114.6 million, an improvement from €79.2 million at the end of the previous year. The company has also reduced its financial debt significantly to €72.3 million, down from €152.5 million. Moreover, net working capital has decreased, reflecting a tighter grasp on cash flow.
On the investment front, Aeffe allocated €2.6 million in capital expenditures during the first nine months of 2024. These investments primarily focused on enhancements to third-party assets and software acquisitions. Additionally, the company undertook disinvestments within its brands, notably the sale of class 3 of the Moschino line.
Overall, while Aeffe Spa has successfully turned a loss into profit, the drop in revenue presents significant challenges. The company’s strategic decisions could ultimately determine its resilience and future growth in the luxury market amidst a fluctuating global economy.
