Salvatore Ferragamo confident despite China woes

Italian luxury goods brand Salvatore Ferragamo is confident it can weather the impact of falling sales in China, Hong Kong and Macau.

The company has admitted to slowing growth in Asia, its largest market, but says it will stick to its previous profit guidance and is confident activities in other markets can balance the impact. That guidance is an EBITDA or about euro 320 million – 27 million more than it achieved in 2014.

In the first half of this year, Asia-Pacific, the brand’s largest market, was the only one where it posted a sales decline, expressed in constant exchange rates. Most of the damage was done in Hong Kong and Macau where the downturn in luxury spending has been well documented.

In China, most of Salvatore Ferragamo’s peers are reporting challenging conditions, revising their overall expectations based on slowing luxury and discretionary spending there.

But Salvatore Ferragamo CEO Michele Norsa told journalists at the Milan Fashion Week: “We’ve been giving a very constant and consistent indication regarding this year.”

However, the company said it would be reviewing prices in markets where the local currency was under pressure. While he did not name China, he did cite Russia and Brazil as examples.