The luxury sector continues to be highly profitable for the family businesses operating within it with the latest results from top shoemaker Salvatore Ferragamo confirming the boom.
Florence-based Ferragamo announced a 30% rise in revenues for the first half of the year to €460 million, up from €354 million for the same period in 2010. Net profit rose by 30% to €46 million and growth wasn’t just strong in the robust Asia Pacific region – Ferragamo saw sales rise by around 40% in Europe, with the US also contributing a small increase in revenue.
The first half results were on top of the group’s strong 2010 annual revenue of €781 million, a rise of 26% from the year before.
The strong performance follows on from other family-controlled businesses in the luxury sector in the first half of 2011. Paris-based Hermes, maker of the famous Birkin handbag, saw sales rise by 22% to more than €1 billion, while rival family business LVMH, chaired by billionaire Bernard Arnault, saw a 13% rise in revenue to €10.3 billion.
Also, luxury car maker BMW, 45% owned by one branch of the Quandt family, reported its best ever first half profits in 2011, with a pre-tax profit of €3 billion.
Ferragamo is currently 58% owned by the founding family, following an initial public offering in Milan in July this year. The IPO diluted family ownership from its earlier 90%, and valued the company at around €2 billion.
The company’s strong cash position will be good news for the group, which plans to expand further by opening 25 new stores and boosting its presence in the Asian market.
Founded by the group’s namesake Salvatore Ferragamo in 1927, son Ferruccio is currently chairman and executive director of the company, while sister Giovanna is vice chairwoman and director. Other family directors include Fulvia and Leonardo, while third-generation James is product director of the women’s leather division.