Jul 31, 2021
Aeffe sees first-half profits soar compared to 2019
Jul 31, 2021
The first half of the fiscal year has given Aeffe reason to be confident again, as the company saw its situation improve thanks to the acceleration of its sales, which increased 76% year over year in the second quarter. From January to June 2021, the Italian fashion group reported revenue of 155 million euros, up 30.4% compared to the first half of 2020, when its operations were negatively affected by the Covid-19 pandemic. The company's sales did not, however, return to pre-pandemic levels, decreasing 10.5% compared to the same six-month period in 2019, largely due to extended store closures in Italy and the rest of Europe, a region which accounts for 71% of the group's total revenue.
Nonetheless, the company, which owns brands including Alberta Ferretti, Philosophy, Moschino and Pollini, and holds licenses for the likes of Jeremy Scott, saw its net earnings triple, soaring from 5.4 million euros in the first six months of 2019 to 17.4 million euros two years later. In the first half of 2020, Aeffe posted a loss of 12.5 million euros. As for the group's EBITDA in the first half of 2021, it came to 20.1 million euros, versus 18.3 million two years earlier.
"The marginality grew more than proportionally compared to the sales increase. This reflects both the significant sales increase and the positive results deriving from costs savings for personnel, rents and overheads," said Aeffe in a release. During the period, the company benefitted from subsidies from the Italian state, the postponement of costs related to advertising and rent reductions for its stores and offices.
The group posted double-figure growth across all markets when compared to the first half of 2020, but struggled to return to 2019 levels, except in Europe, excluding Italy. Despite the absence of tourists, sales in the region rose to $51.2 million, up 32% compared to the same period two years ago, while its share of Aeffe's total sales increased from 22% to 33%.
In contrast, the company's largest market, Italy, which represented 46% of total sales in the first six months of 2019, now only accounts for 38% of the group's revenue, having posted a 26.7% reduction in sales in H1 2021 compared to the same period two years ago. Asia also saw its sales decrease to 34.9 million euros, a drop of 23.3% compared to the first half of 2019, while revenue in the Americas increased 14.4% over the same period.
Once again, Aeffe's flagship brand, Moschino, which the company recently took complete control of following the purchase of the remaining 30% stake it did not previously own, confirmed its predominance in the group's portfolio, representing 82% of total revenue in the first half the year, compared to 79% in 2020 and 75% in 2019. The brand posted revenue of 128.3 million euros in the period, declining only 1.4% compared to the first half of 2019.
As of June 30, Aeffe boasts 57 company-operated boutiques and 138 franchise locations, for a total of 195 monobrand stores, compared to 203 on the same date last year. Retail contributed 18% of the group's revenue, compared to 27% in 2019, and saw year-over-year growth of 3.5% in constant currencies, reporting sales of 28 million euros. This represented a decline of 39% compared to 2019. In the wholesale channel, which represents 78% of the group's revenue, sales jumped 40% compared to 2020, returning to pre-pandemic levels with a total of 121 million euros.
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