The group said this result made it possible to return to revenue growth a year in advance of its strategic plan, thanks primarily to the positive performance of comparable sales, which were up 7% compared to 2018.
The Italian fashion group had planned a three-year period of overall turnover reduction as part of a strategy, announced in 2017, to streamline and “upgrade” the brand portfolio and distribution network. The brand portfolio includes Giorgio Armani, Emporio Armani and A|X Armani Exchange brands.
Armani Group said these strategic actions in 2019 led to a 12% decrease in earnings before tax to €175m (£157m) from the prior year.
Meanwhile, brand revenues, including licences, amounted to €4.1bn (£3.7bn) in 2019, compared to the same period in 2018.
In 2019, the Armani Group, having “significantly” reduced its wholesale distribution network, expanded the direct distribution network through the acquisition of points of sale in a number of Chinese provinces (mainly Guangdong and Sichuan), in Macao SAR and in Mexico. At the end of 2019, the number of directly managed stores totalled 598, an increase of around 70 compared to the end of 2018.
Assets and the net financial position remained stable. At the end of 2019, the group’s net cash and cash equivalents stabilised at €1.2bn (£1bn), compared to €1.3bn (£1.2bn) at the end of 2018. The group said this was as a result of greater investment in working capital represented by collection and store renewal projects and by the stock of goods offered in the group’s broader network of directly managed stores.
Armani Group said: “Although it is not yet possible to accurately estimate the ultimate economic impact of the Covid-19 pandemic, the group has both the resources and a solid capital and financial structure that will enable it to cope with uncertainties and ensure it continues resolutely in implementing its strategic plan – a plan based on quality and on the Armani brand identity, as well as on current and future corporate initiatives.”
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