COVID-19 impact hurts Valentino’s results and revenues in 2020
MILAN – ValentinoThe 2020 net profit and revenue has been affected by the impact of COVID-19 and associated travel restrictions and the closure of its stores due to lockdowns around the world.
Friday, the Rome-based team sewing house recorded a net loss of 127 million euros for the 12 months ended December 31, compared to a profit of 33 million euros in 2019.
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Earnings before interest, taxes and depreciation were halved to 146 million euros, down 51% from 298 million euros in 2019.
The company was more affected in the first half of 2020. EBITDA over this period amounted to 39 million euros, or 11% of sales and a decrease of 75% compared to 154 million euros in the first half of 2019.
A partial reversal was recorded in the second half, with an EBITDA of 107 million euros, representing 21% of sales and showing a decrease of 25% compared to the 144 million euros for the same period of 2019.
As reported, online sales soared 62% at Valentino and retail sales in mainland China grew 44% in 2020, but that could not offset the consequences of the health emergency, which caused total revenues to drop 28% to € 882 million. This compares to 1.22 billion euros in 2019. Online sales now represent 14% of total retail turnover.
Valentino praised its customer and distance selling strategy, further strengthened in the second half of 2020, which helped accelerate activity. During the year, the Valentino online channel alone recorded a 77% increase in sales.
Valentino recorded an operating loss of 119 million euros in 2020. Adjusted EBIT, excluding the economic impact of impairment tests, amounted to a loss of 62 million euros. The depreciation effect of 57 million euros is mainly due to the closure of certain stores around the world.
While chief executive Jacopo Venturini was not available for further comment, the company said in a statement that “today more than ever, it is fundamental to focus more and more on creativity, human capital and personalized customer experiences. The focus on these key pillars provides a solid foundation for navigating a long-term changing global landscape. In this regard, the new management has strongly implemented the first steps of the new strategy with signs of first positive results from the last quarter of 2020 and the first quarter of the current year. “
Venturini, who joined Valentino last June taking over from longtime Stefano Sassi, has gradually built up his management team, adding new roles to the company. In January, Enzo Quarenghi joined the house as Director of Customer and Digital Acquisition. This post is part of a new division led by Venturini, to which Quarenghi reports, and the new role signals Valentinos increased emphasis on digital and an acceleration of its strategy to place the customer at the center of its sales, communication and marketing activities.
As reported, last october, Valentino appointed Rosa Santamaria Maurizio as director of human resources – also a new role. A month earlier, Valentino has appointed Laurent Bergame CEO, Americas. Bergamo reports to Commercial Director Marco Giacometti, who took office in April 2020.
In April of this year, Valentino appointed Mitchell Bacha as CEO of Greater China, responsible for helping to develop the brand in this region and signaling the company’s increased focus on the region. He will support the expansion of the company’s network, focusing on the retail channel, while continuing to build brand awareness in the region and strengthen its e-commerce presence.
There are 28 Valentino stores in the Grand China and two openings are planned in China this year: one at Mall Center 66 in Wuxi City in May and one at Mall Deji in Nanjing City in August.
In May, Valentino appointed Masumi Shinohara as CEO, Japan and South Korea. There are 31 directly operated stores in Japan and 15 in South Korea. In February, Valentino opened a unit in the Hyundai Yeouido Parc One department store in Seoul. Six new directly operated stores are expected to open in South Korea in the coming months.
The luxury house is controlled by Qatar-based Mayhoola, who also owns Balmain and Pal Zileri.
Last year, Valentino expanded his store in Dallas and opened a unit in Mexico City for a total of 214 owned stores around the world.
As reported, Valentino has closed its The flagship of Fifth Avenue in New York and his store on Canton Road in Hong Kong last year.
Last month Valentino said he was revamping his positioning and going fur-free from 2022. He said he plans to focus on his signing line and end his young Red. Valentino collection from 2024, which was produced in-house. Red Valentino was first launched in 2003.
The Milanese fur company Valentino Polar, 100% owned by Valentino since 2018, will cease production at the end of 2021. The last collection to include fur will be the fall season 2021-22.
The company works closely with union representatives to manage organizational issues related to the closure of the fur company and in compliance with regulations in different countries, with the aim of having minimal impact on employees. .