Tod 'S Group Continues To Slack In Hongkong Market

Tod 's Group continues to be weak in Hongkong market as a store in Tod's, Hongkong.

Italy

group

The results of the latest first half financial results were disappointing. In the six months ended June 30th, the group's net profit dropped by 25.6% to 37 million 400 thousand euros over the same period last year of 50 million 300 thousand euros.

In the first half of the year, business income fell 3.4%, 497 million 600 thousand euros, operating profit decreased 20% to 62 million euros compared with the same period last year; profits before interest tax depreciation and amortization fell 16.2% to 86 million 300 thousand euros.

For this negative result, the group blamed the failure to update the product in a timely manner, enhance the coverage and distribution channel mix, and the higher the rental and labor costs of the store, the report showed that the number of employees in the group increased from 4504 to 4531 in the past year.

By product category

Group core business

In the first half of the year, it fell by 2.5% to 400 million 300 thousand euros, and leather and accessories products declined 10.7% to 69 million 300 thousand euros, while clothing revenue increased 3.7% to 27 million 300 thousand euros.

Tod 's logo product "bean bean shoes" is difficult to give consumers continuous attraction, especially young consumer groups.

Group spokesman said: "sales figures in the first half of the year reflect a negative trend in the future development of some TOD'S products."

Emilio Macellari, group chief financial officer, predicts that the new TOD'S bag series launched in October will help improve the "very poor" performance of leather goods in the first half of the year, but that does not mean that TOD'S will not pay attention to its core footwear business.

Earlier analysis showed that its core brand TOD'S performance was in a predicament. The TOD'S brand earned a lot of revenue from its trademark product "Doudou shoes". However, compared with other luxury brands, TOD'S brand products were outdated and too single to attract consumers, especially young consumers.

However, Emilio Macellari stressed: "footwear is an indispensable part of TOD'S's overall strategy. In order to maintain the brand's tradition and culture, the group will pay more attention to the promotion of quality and iconic products, while promoting Italian lifestyles."

According to the brand name of the group

The sales performance of group core brand TOD'S was affected by the continuous weakening of European and American tourist consumption and the Greater China region, a sharp decline of 7.2% to 282 million 500 thousand euros compared with last year.

Affected by the slowdown in Italy's tourism industry, its Hogan brand sales fell by 2.5% to 106 million 100 thousand euros in the first half of this year.

Another brand Fay recorded an increase of 8.8% to 24 million 900 thousand euros, with sales growth in all regions of the brand, with the most obvious growth in Asia and two digit growth.

The sales performance of Roger Vivier also increased in the first half of the year, but the growth rate began to slow down, with an increase of 6.2% to 83 million 400 thousand euros.

By Region:

TOD'S group's largest market Italy business revenue was affected by its brand Hogan revenue reduction, down 2.7% to 148 million 800 thousand euros.

Europe's revenue declined by 1.7% to 120 million 100 thousand euros, which was mainly affected by the sharp slowdown in tourist consumption.

The Luxury Retailing Industry in Europe is facing difficulties. The weakest competitiveness is France and Britain.

The operating income of the Americas market decreased by 6% to 48 million 700 thousand euros, or 54 million 500 thousand US dollars.

In the Greater China region, business revenue fell 9.5% to 107 million euros, which was mainly affected by the continued weakness in Hongkong market sales, while sales in mainland China also declined slightly.

The rest of the world is driven by strong sales growth in Korea, with revenues rising 4.1% to 73 million euros in the first half of this year.

In addition, the revenue of group stores in the first half of the year decreased by 4.9% to 311 million 200 thousand euros.

In the first half of this year, the growth rate of same store sales decreased by 14.3% compared with the same period last year, reflecting the slowdown in global consumer spending and the growth of luxury goods.

Authorized sales outlets recorded 186 million 400 thousand euros in the first half of the year, or 1%.

According to the report, as of June 30th, the group had 261 Direct stores and 103 franchises, adding 10 direct stores and 10 franchise stores respectively.

Diego Della Valle, group chairman and chief executive, points out that the performance is largely affected by the depressed industrial environment and volatile market, but the negative impact of organic growth and profit margins of stores will be offset by the growth of planned cost control and reasonable market strategy.

He emphasized that the future strategy of the group is to focus on the development of high quality products, mainly footwear, handbags and small leather products, to enhance the exquisite craftsmanship of the brand, and emphasize the lifestyle and strong innovation of Italy. At the same time, the group will focus on the development of digital platform.

In a telephone conference with analysts, Emilio Macellari, chief financial officer, said the group is considering closing its poor stores in 2017, and has closed eight stores in the first half of this year. The group does not allow the existence of unprofitable stores.

In response to this problem, Diego Della Valle emphasized that the group's strict control over the expansion of the store network would only open new stores in special places, and would pay more attention to the organic growth of the existing distribution network.

At the beginning of this year, TOD'S had split up with women's designer Alessandra Facchinetti. The group said that it did not need traditional designers now.

Diego Della Valle said earlier that it will make a comprehensive rectification of TOD'S, eliminate seasonal and launch new products every month to increase exposure opportunities in digital media. The CEO has warned that in the coming years, the new fashion system will emerge and the whole business mode is changing. TOD'S group will complete the pformation by the end of this year.

However, Exane BNP Paribas luxury management Luca Solca analysis said that Gucci's innovation and Hermes's continued high growth still stand out. TOD'S seems to have yet to find a reasonable way to re stimulate growth.