China weakness felt as Tod's sales drop 4.7% in first quarter
MILAN, May 15 (Reuters) -Turnover at Italian luxury shoemaker Tod's TOD.MI fell by 4.7% at constant exchange rates in the first quarter to 258 million euros ($280 million), with its key brands hit by weakness in the Chinese market.
Sales in its Greater China region fell 21%, impacted by a sharp drop in store traffic and weak consumption, as well as a challenging comparison base, Tod's said. The figure groups its performance in mainland China, Hong Kong, Macau and Taiwan.
Among Tod's brands, Roger Vivier reported the worst performance, with sales declining just over 20%.
WHY IT'S IMPORTANT
Sales updates from Europe's big luxury groups have showed contrasting trends among brands as demand, especially in China, slows down, leaving a cloud over the outlook for the industry.
BY THE NUMBERS
Tod's sales in Greater China tumbled 21.1% in the first quarter, while they rose 19.8% in the Americas. In Europe, excluding Italy, sales increased 4.8% at constant exchange rates.
CONTEXT
Tod's is set to be delisted from the Milan bourse after the successful offer by LVMH-backed private equity firm L Catterton, in agreement with Della Valle family, the Italian group's main shareholder, and LVMH.
Britain's Burberry BRBY.L reported a 34% drop in annual operating profit on Wednesday after it faced the challenge of repositioning its brand against a backdrop of slowing luxury demand.
KEY QUOTE
"With the success of the tender offer, the Tod's group is exiting the stock exchange. We made this choice to develop the full potential of our individual brands, making all the necessary investments in a timeline we deem most suitable", said Tod's Chairman and CEO Diego Della Valle.
($1 = 0.9204 euros)
Reporting by Elisa Anzolin
Editing by Keith Weir
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