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MILAN — Aeffe Group shares on the Milan Bourse fell 7.06 percent to 1.18 euros by early afternoon as the Italian fashion group reported a loss in 2022 and a performance that was impacted by the restrictions in China.
In the 12 months ended Dec. 31, Aeffe registered a net loss of 9 million euros compared with a profit of 12 million euros in 2021, although the company noted that the latter figure included non-recurring tax benefits of 9.5 million euros.
In 2022 revenues amounted to 352 million euros, up 8.4 percent compared to 325 million euros in 2021.
Aeffe comprises the Alberta Ferretti, Moschino, Philosophy di Lorenzo Serafini and Pollini brands.
Earnings before interest, taxes, depreciation and amortization totaled 36 million euros, edging up 0.6 percent on 35 million euros in 2021, dented by the Chinese market, which contributed to an increase in costs both variables and fixed.
Operating profit amounted to 1.2 million euros, falling sharply from 9.1 million euros in 2021.
However, Aeffe executive chairman Massimo Ferretti said that “we positively evaluate 2022 results and we are particularly satisfied with the investments implemented, including the finalization of the Moschino direct distribution project in China, confident that the choices made will be reflected in a progression of both revenues and profitability in the medium term.”
As reported, the company took full control of Moschino in 2021, paying 66.6 million euros for the 30 percent stake in the brand it didn’t own. It also acquired the license to produce and distribute the Love Moschino collections of women’s apparel in house for 3.6 million euros.
In 2021, Aeffe also took control of Moschino’s distribution in mainland China, signaling the increasing relevance of that market for the label. This involved around 20 stores, which have been operated for the past 10 years by Scienward Fashion and Luxury (Shanghai) Co. Ltd.
“With attention to the evolution of the market context and the related contingencies, the group is still committed to strengthening the development plans of the proprietary brands both at a commercial level and in terms of optimization of the corporate and organizational structure,” concluded Ferretti.
In 2022, sales of the ready-to-wear division amounted to 231.8 million euros, up 5.3 percent compared to 2021.
Revenues of the footwear and leather goods division totaled 163.6 million euros, gaining 16.9 percent.
The retail channel was up 22.6 percent to 88.5 million euros, driven by the change in distribution of Moschino in China, with the opening of 23 retail boutiques. The related benefits deriving from the project have only partially been recorded on retail revenues starting from the second half of 2022, despite restrictions adopted on site to contain the spread of COVID-19 infections.
The wholesale channel grew 4.1 percent to 248.6 million euros, representing 70.6 percent of sales.
Royalties rose 9.5 percent to 14.9 million euros.
Despite the war in Ukraine, sales grew in all markets, except the Far East, due to the COVID-19 restrictions, with increases in main reference markets, including Italy, Europe and America.
Sales in Italy rose 9.4 percent to 144.5 million euros, representing 41.1 percent of the total, lifted by a recovery of the retail channel, up 17 percent on 2021.
Revenues in Europe rose 11.6 percent to 117.8 million euros, accounting for 33.4 percent of the total, driven by a significant acceleration of the retail channel, which showed an increase of 59.3 percent compared to the previous year.
Sales in Asia and the Rest of the World inched down 0.5 percent to 65 million euros, representing 18.5 percent of the total. This decrease was mainly generated by the reorganization of the wholesale channel in China.
Sales in America climbed 14 percent to 24.5 million euros, or 7 percent of the total, boosted by a 34.1 percent increase of the wholesale channel in the region.
Investments in 2022 amounted to 9 million euros, mainly referred to works on third party assets, the opening of new stores and outlets as well as purchases of software.
As of Dec. 31, debt net of the IFRS 16 effect amounted to 127 million euros, compared with 93 million euros at the end of December 2021. Aeffe noted that in the last two years it has made two strategic investments “of an extraordinary nature” relating to the purchase of the minority shareholding of Moschino and the change of distribution in China of the brand for a total of 90 million euros.
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