MILAN, March eight (Reuters) - Salvatore Ferragamo will take the time wanted to find a new chief executive to help turnaround the Italian shoemaker, its chairman said on Thursday, ruling out a sale of the corporate.
The household-owned agency, well-known for footwear worn by Hollywood stars similar to Audrey Hepburn, is striving to revamp its product providing to attraction to a younger clientele and reverse falling gross sales and profitability.
In an indication this could take time, the company issued a profit warning in December and final week misplaced CEO Eraldo Poletto, fuelling hypothesis of a potential sale.
"The sale of the company is out of the question," mentioned Chairman Ferruccio cheap Ferragamo Belts, who has taken on momentary managing powers, after the group reported a 23 % drop in core revenue for final 12 months.
The Florence-based group warned the damaging developments seen in the last few months of 2017 had been persevering with this year, resulting from opposed overseas exchange moves and the actual fact its lower-priced factory outlets had been performing higher than regular outlets.
The chairman said he would run the corporate for as briefly as possible, however would take the time wanted to search out the best candidate, who would come from exterior the corporate.
The group did not give a purpose for the departure of Poletto, who came from unlisted, premium handbag maker Furla. Some analysts have said the ferragamo belt outlet family had grown impatient together with his strategy and anticipated a quicker turnaround.
In February last 12 months, the group mentioned it deliberate to grow revenue at twice the market price between 2017 and 2020, backed by a drive to improve performance at current stores and updates to its product ranges.
However since launching its new business plan, the group’s core profit margins have been falling, hurt partially by a clean-up of inventories.
Final year’s earnings earlier than curiosity, tax, depreciation and amortisation (EBITDA) of 249 million euros ($306 million) had been broadly in keeping with a Thomson Reuters estimate of 244 million euros. As a proportion of sales, the EBITDA margin slipped to 17.8 percent from 22.5 % in 2016.
The company cut its dividend to 0.38 euros per share, down from 0.46 euros paid on 2016 outcomes.
Since the December revenue warning, Ferragamo shares are down about 4.1 percent against a 2.4 % rise in Italy’s blue-chip index. Buying and selling at 28.6 occasions its anticipated earnings, the stock remains to be seen as expensive by many analysts.