MILAN (Reuters)
Salvatore Ferragamo (MI:SFER)
will focus on boosting profits this year to combat lower growth in the
luxury industry as a whole, its outgoing chief executive said on Sunday.
Slower
economic growth in China, plunging oil prices, volatile exchange rates
and security threats that have curbed tourist flows have all put the
brakes on spending on upmarket handbags, shoes and other accessories.
Ferragamo
posted a larger-than-expected 5 percent rise in first-quarter core
profit in May but revenue fell 2 percent to 321 million euros ($362
million).
Speaking
before the brand's menswear show at Milan Men's Fashion Week, Chief
Executive Michele Norsa said the luxury sector would have to focus on
managing risks.
"Growth will not be as strong as in past years,
when the Chinese economy and new markets have been opportunities for the
industry," said Norsa.
He said Florence-based Ferragamo, whose
founder designed ballet shoes for Audrey Hepburn, is on track to
continue increasing profitability and that it would not be affected if
Britain voted to leave the European Union.
Ferragamo will
continue to focus on widening the profit margins on its products rather
than pushing sales, "given the growth of volumes will be hard to
forecast", Norsa said.
Norsa, who has been at the helm of the
luxury group for a decade and presided over its stock market debut in
2011, is due to leave by the end of the year. He will be replaced by
Eraldo Poletto, former head of handbag maker Furla.
Ferragamo's
shares have more than doubled in value in the five years since the
listing, but have slid 9 percent so far this year as the luxury industry
faces weakened demand.
