July 31, 2018 / 4:11 PM / 10 months ago

Italy's Ferragamo to be put back on track, execs say

MILAN (Reuters) - Bosses of struggling Italian luxury goods maker Salvatore Ferragamo said there was “work to be done” and “things to be put back in the right direction” after the group posted sliding revenue and profit for the first half of the year.

The Florence-based group, which issued a profit warning in December, has been battling falling sales and profitability, partly due to a clean-up of inventories. It said on Tuesday it would continue to invest in relaunching the brand.

The shoemaker parted ways with Chief Executive Eraldo Poletto in March, a year after he unveiled an ambitious plan for the company aimed at refreshing the style of its products and increasing its appeal to a younger clientele.

Chairman Ferruccio Ferragamo, a member of the family which controls the Milan-listed group, has since been serving as interim CEO.

Micaela Le Divelec Lemmi, a highly-respected former Gucci executive, was appointed on Tuesday as the group’s new CEO after serving as managing director since April.

“I acknowledge there is work to be done, this is not a concern, but more of a push,” said Le Divelec.

She added it was too early to say what the key priorities of her work would be.

Ferragamo said there were several things to “put back in the right direction”, in terms of products, communication and the group’s digital strategy, but he reiterated the company relaunch did not amount to a “revolution”.

Revenues were down 6.2 percent year-on-year to 674 million euros, dragged down by wholesale and with sales in all markets falling. Like-for-like sales in the first six months of the year were down 2 percent.

Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 14.5 percent compared to the same period in 2017.

In June the Ferragamo family sold a 3.5 percent stake through an accelerated book building.

Ferragamo said the family remained committed - “we are in love with the company” - and the sale was carried out to increase the company’s free float and give more liquidity to the family holding company.

Reporting by Giulia Segreti; Editing by Alexandra Hudson and Emelia Sithole-Matarise

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