Thu, Aug 02, 2018 - Page 10 News List

Ferragamo picks Gucci CFO to lead turnaround

Bloomberg

Salvatore Ferragamo SpA appointed Micaela le Divelec Lemmi, a 20-year veteran of French luxury conglomerate Kering SA, to become its new chief executive officer as the Italian shoemaker seeks leadership for its turnaround bid.

Le Divelec Lemmi, who served as chief financial officer of Kering’s Gucci brand, has been general manager of Ferragamo since April.

The stock rose as much as 4.5 percent yesterday, giving the company a market value of 3.5 billion euros (US$4.1 billion), as analysts said the appointment signaled an extended rebuilding effort at Ferragamo.

Ferragamo, known for making shoes for Audrey Hepburn and handbags for former British prime minister Margaret Thatcher, has struggled to refresh its look.

Former chief executive officer Eraldo Poletto stepped down earlier this year after the company backed away from its financial targets, saying it needed to spend more on technology and marketing.

“We lack visibility and details around the potential traction of management’s turnaround plan, and believe the newly appointed CEO may imply a continuing transition period,” Raymond James analyst Hermine de Bentzmann wrote.

Ferragamo said revenue fell 3.4 percent at constant exchange rates in the first half of the year to 674 million euros.

Analysts had predicted 685 million euros.

The chief executive officer appointment is effective immediately, the Florence, Italy-based company said in a statement on Tuesday.

“I acknowledge the fact that there is some work that needs to be done,” Le Divelec Lemmi said in an interview. “I really believe that this is a brand which deserves respect. This respect is what is animating me.”

Ferragamo’s sales fell amid a buoyant market for luxury goods, driven by runaway Chinese demand.

Sales at French luxury giant LVMH Moet Hennessy Louis Vuitton SE last quarter expanded by 11 percent, while Gucci grew 40 percent.

Second-quarter sales took a hit as Ferragamo restricted markdowns in an effort to protect its high-end positioning, chief financial officer Ugo Giorcelli said on a call with analysts.

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