By Manuela Mesco
Italian fashion firms saw their revenues strongly boosted by
currency tailwinds, as the weakening of the euro against the dollar
has been supporting firms producing their goods in Europe but
selling them in foreign markets such as the U.S. and Asia.
Moncler, the luxury jacket maker, said Tuesday its revenues rose
38% in the quarter compared with the previous year. Salvatore
Ferragamo's revenues rose 10% on the year, the company said
Wednesday. But at constant rates, excluding the effects of exchange
rates, the two companies' revenues would be up 30% and 2% on the
year, respectively.
Similarly, high-end clothing maker Brunello Cucinelli said
Tuesday its first-quarter revenues rose 12%, but only 9% at
constant rates.
Beginning in the last quarter of 2014, the European luxury
industry has seen several winners from the weakening of the euro
against the dollar, partly driven by aggressive monetary policy by
the European Central Bank.
Such currency tailwinds, coming after several years of negative
impact from exchange rates, has increased the value of sales of
luxury goods overseas, in countries such as in China, Japan and the
U.S. This benefits companies that are more exposed to those
countries, such as Moncler or Ferragamo, whose sales in Asia and
the Americas account for half and over 60% of total revenue,
respectively.
In April, for example, LVMH Moët Hennessy Louis Vuitton SA
reported a 16% rise in sales for the first three months of the year
to EUR8.3 billion, as sluggish organic growth, which strips out
currency effects, acquisitions and disposals, was offset by the
effect of the weak euro. Chief Executive Bernard Arnault said the
weaker euro is likely to buoy sales of the French firm as he
expects the positive sales trend seen in the first quarter is
likely to continue through the year.
Italian firms posted particularly strong growth rates in the
American market in the first quarter. Moncler said Tuesday its
sales in the Americas rose 85%, but only 61% at constant rates.
Salvatore Ferragamo said North American revenues rose 16%, but only
3% at constant rate. Brunello Cucinelli said its North American
sales rose 34% compared with the first quarter 2014, to EUR34.5
million.
Shoe and clothing firm Tod's, which saw its operating profit
fall 24% in the first quarter, said it plans to focus more strongly
on the U.S. market, "which is becoming attractive once again," said
chairman and chief executive Diego Della Valle on Wednesday.
A surge of sales in Asia is also contributing to the currency
tailwinds. Ferragamo, for example, said that its fastest-growing
market in the first quarter was Asia-Pacific, as revenues in the
area rose 11%. At constant rate sales in the region were flat. In
China, sales increased by 22%, but at constant rates this figure
was 9%. Moncler said its sales in Asia surged by two-third in the
quarter compared with the previous year.
Write to Manuela Mesco at manuela.mesco@wsj.com
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