In a notable turnaround, Italy’s Aeffe Spa has posted a robust net profit of €35.2 million, approximately $38.7 million, for the first nine months of 2024, marking a significant recovery from a loss of €17.8 million in the same timeframe last year. However, the company experienced a decline in revenue, which fell by 17.6 percent year-over-year to €207.8 million.
Despite the dip in revenue, Aeffe’s consolidated EBITDA surged to €90.9 million, translating to a 43.8 percent margin, a marked improvement from the previous year’s figure of €12.2 million. The decline in revenue was evident across all regions, with wholesale taking the hardest hit, plummeting by 20.3 percent.
The company, which operates as a luxury group in Italy, is strategically pivoting amidst a backdrop of slower global consumption patterns. Massimo Ferretti, the executive chairman of Aeffe Spa, acknowledged the challenges posed by the current climate, characterized by complex political and social issues. He expressed confidence that the reorganization of the Moschino brand and the rebranding of the Alberta Ferretti label would pave the way for new opportunities.
Diving deeper into regional performance, Aeffe’s turnover in Italy totaled €89.5 million, down 17.1 percent from the prior year. The wholesale channel within Italy contracted by 23 percent, with retail showing a decrease of 7 percent. In the broader European market, excluding Italy, revenue fell 18.3 percent to €63.6 million, affected by specific country-level challenges. Meanwhile, the Asia and Rest of the World sectors reported turnover of €42.8 million, representing a 19.2 percent decline. In the Americas, turnover decreased by 15.3 percent to €11.9 million.
Examining by distribution channels, wholesale sales, which account for 66.2 percent of turnover at €137.6 million, fell by 20.3 percent. Retail sales, at 30.3 percent of total sales, were down by 12.3 percent. Royalties, which made up 3.5 percent of consolidated revenue, also saw a reduction of 7.4 percent.
The company’s balance sheet as of September 30, 2024, reflects a net equity of €114.6 million and financial debt of €72.3 million, a significant decrease from €152.5 million at the end of 2023. Net working capital registered at €93.6 million, indicating improving efficiency as it moved down from €113.5 million in September 2023.
In terms of investments, Aeffe allocated €2.6 million primarily for enhancements in third-party assets and software acquisitions during the nine-month period. The company has also strategically disinvested, highlighted by the sale of a lower-performing asset under the Moschino brand.
This performance report underscores Aeffe Spa’s resilience in navigating a challenging market. The strategic focus on brand enhancement and operational improvements aims to position the company favorably for the future, despite ongoing headwinds in the luxury fashion sector.
