Aeffe Spa, the renowned luxury fashion group based in Italy, has demonstrated a remarkable turnaround by announcing a net profit of €35.2 million, or approximately $38.7 million, for the nine months ending September 30, 2024. This marks a significant recovery from a loss of €17.8 million during the same period last year. However, the company did experience a revenue decline, reporting €207.8 million, which represents a 17.6 percent drop year-over-year.
The company’s consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) showed impressive growth, soaring to €90.9 million, equivalent to an EBITDA margin of 43.8 percent. Aeffe Spa indicated that all geographical regions observed declines in turnover, with the wholesale sector facing the steepest decline of 20.3 percent.
The adverse effects of slowing global consumption patterns in the fashion and luxury industries were highlighted as the main challenges during the period. Aeffe’s strategic initiatives have been centered around reorganizing its brands amid these global headwinds. Massimo Ferretti, the executive chairman, expressed confidence in the strategic direction, particularly emphasizing the revamping of the Moschino brand and the rebranding of Alberta Ferretti as crucial steps toward unlocking new opportunities.
Regionally, Aeffe reported that its turnover in Italy fell by 17.1 percent year-over-year, amounting to €89.5 million. The wholesale channel suffered a notable contraction of 23 percent, while retail sales saw a 7 percent decrease. In Europe, excluding Italy, revenue dipped by 18.3 percent to €63.6 million. The Asia and Rest of the World category recorded a 19.2 percent decline, and the Americas saw a drop of 15.3 percent in turnover.
By distribution channel, wholesale accounted for 66.2 percent of overall sales and experienced a decline of 20.3 percent. Retail, which constituted 30.3 percent of revenues, saw a less severe decrease of 12.3 percent. Additionally, revenues from royalties fell by 7.4 percent.
Aeffe’s balance sheet on September 30, 2024, showed a notable increase in net equity to €114.6 million from €79.2 million at the end of 2023. Meanwhile, net financial debt was reduced to €72.3 million, significantly down from €152.5 million. The company’s net working capital decreased to €93.6 million, reflecting a commitment to efficient resource management.
Investments made during the nine-month period totaled €2.6 million, primarily directed toward improvements in third-party assets and software purchases. Among the noteworthy actions, Aeffe also completed the sale of a portion of the Moschino brand.
As Aeffe looks ahead, there is a palpable sense of resilience and determination to navigate the complexities impacting the luxury fashion sector amidst political and social instability, underscoring a hopeful outlook for the future.
