During the Milan Fashion Week, the Mediobanca Research Area presented the annual update of the survey on Italian fashion, based on budgets for the period 2009-2013. The novelty is the spotlight on a aggregate (“Aziende Moda Italia”) which includes 135 companies based in Italy, of which 120 manufacturing and 15 of retail distribution, with a turnover of at least 100 million euros in 2013.
For 100 companies the ownership is Italian, for 35 foreign (of these 15 are French). In addition to the major operators in the sector, ASM analysts highlight the top 10 fashion groups ("Top Moda Italia") based in Italy. Among the highlights: the importance of the sector for Italian exports, the fundamental contribution of women's work to the success of the industry, the positive trend of the main Italian fashion groups compared to the large private industry (despite the difficult macroeconomic context), the financial solidity of Italian fashion companies and finally the push given by the big players of Top Fashion to the development of the sector.
Europe excels thanks to tourism
The world turnover of fashion is estimated in 2013 at around 218 billion euros. Europe represents the first world market with around 74 billion euros (+2% on 2012), the Americas the second at 70 billion, Asia-Pacific stands at 46 billion, while the Japanese market drops to 17 billion ( -10%, but would be up 14% at constant exchange rates).
The main drivers: online sales, tourist shopping and single-brand retail
Tourist shopping is booming. In fact, travel retail represents 50%-60% of the local total. This market is estimated at around 6 billion euros in Italy and 40 billion in Europe. Online sales are worth about 10 billion euros and a strong growth of 2014%-20% is estimated for 30 to reach about 15% of the total value of the luxury market in the near future. Fundamental the strengthening of mono-brand retail (flagship stores) especially in the most prestigious locations to fuel the aspirational and evocative value of "Italian style" consumption.
Industry relevance
The Italian fashion chain comprises about 18% of all manufacturing companies and represents 15% of their employment. It is expected that in 2014 the sector will produce a positive trade balance of over 25 billion euros, equal to approximately 26% of the Italian manufacturing trade balance. Leather goods, textiles and clothing "pulled the sprint" of Italian exports in 2014.
Italian fashion: a “pink” success
In Italian manufacturing fashion, 56% of the workforce is female, against 27,5% of all Italian manufacturing. In clothing it reaches 73%. A success that therefore comes from female intelligence, creativity and manual ability. In the distribution of fashion, the presence of women is 71% compared to 49% of all Italian commercial activities.
The giants of Top Moda Italia better than big industry
In 2013, large Italian industry recorded a drop in turnover of 1,9% against a progression of 1,4% for the Italian fashion companies and 4,4% for TopModa. The ebit margin of TopModa is almost double (15,1%) of that of large Italian industry (8,4%). Even the roe of TopModa is higher. But the most positive note is that the fashion companies appear decidedly more capitalized, with financial debts equal to less than 40% of equity for the Italian fashion companies and even less than 9% for the Top Modas (143% the ratio in the large industry ). An important factor is the abundance of cash and cash equivalents, equal to almost 4 times the financial debt for TopModa, compared to an incidence of 66% for Fashion Companies and 38% for industry. A real "treasure" to protect yourself from the crisis and maybe some acquisitions.
Prada in pole position for revenues
The aggregate revenues of the Italian fashion companies recorded a growth of 32,4% since 2009, reaching 55,2 billion in 2013. The most consistent progress concerned jewelery (+81,8%), leather goods (+62,4 %) and eyewear (+33,7%); clothing (+19,8%) and textiles (+19%) are below the average. The TopModa aggregate shows a more robust growth of +43,8% and reaches 14,4 billion. Prada achieves the most sustained growth and increases by +129,8% on 2009. Ferragamo follows (+103,8%). The turnover in 2013 of Prada, the largest of the Top Moda companies, amounted to 3.587 million, ahead of Armani (2.186 million) and Renzo Rosso's OTB (1.552 million). Valentino (+21%) achieved the largest increase in turnover over 2012. Followed in the top5 by: Ferragamo (+9%), Prada (+8,8%), OTB (+4,8%) and Armani (+4,5, 0,4%). The only decreases concern Max Mara (-6,2%) and Miroglio (-XNUMX%).
Foreigners like Italian fashion
In 2013, the development of sales in TopModa originated from +1,4% on European markets and from +7,1% on non-European ones. The presence on foreign markets has proved to be significant above all for TopModa with peaks of 92% for Zegna, 89,3% for Ferragamo, 88,3% for OTB, 85,3% for Valentino, 84,6% for Prada, 79 % for Armani and 78,6% for D&G.
Ferragamo and Prada the most profitable
In 2013, the Italian fashion companies recorded an ebit margin of 9,1% driven by leather goods (14,4%) and eyewear (12,9%), while in TopModa the ebit margin reached 15,1% with Prada at the top of the ranking with 26,3%. Followed by Tod's (20%), Armani (18,6%) and Ferragamo (17,7%). High profits for Italian fashion companies, but down on 2012: 2,1 billion euros in 2013 (2,6 in 2012), driven by leather goods (1,1 billion), clothing and eyewear (0,5 billion each) . Textiles and retail distribution closed in the red. Even the net profit of TopModa lost ground in 2013 (-15% on 2012, from 1,3 to 1,1 billion), with a drop in ROE from 22,1% to 16,6%. The cumulative net profits in the period 2009-13 by TopModa amounted to 4,2 billion euro against which dividends were paid for 1,9 billion, for a payout equal to 46%. Max Mara and OTB, while generating profits, did not distribute any dividends in the 2009-13 period; as did D&G with the exception of a modest share of reserves in 2013. Listed companies Tod's and Ferragamo, with 75% and 57% respectively, scored the highest payout. The net profitability and equity results of Ferragamo and Prada stand out, with roe at 70% and 30,5% respectively and roi at 44,4% and 31,9%. Armani is the third company for roi (30%). Tod's follows with roi and roe both above 20%. Less brilliant performances for OTB, Valentino and Miroglio.
The main fashion companies in Italy are solid: 6 out of 10 are "investment grade"
Overall, the Italian fashion companies have a solid financial structure due to the low incidence of financial debt on equity. Companies under Italian control are less indebted than those under foreign control: 35,2% compared to 57,8%. Six out of ten companies have “investment grade” 2013 balance sheet data, three out of ten are intermediate, only one out of ten appears financially fragile. TopModa shows an even more solid and progressively strengthening financial structure. In 2013, financial debts amounted to 8,6% of shareholders' equity and liquidity, up by 6,6%, amounted to 3,9 billion: financial debts accounted for 25% of liquidity. All the TopModa companies have more liquidity than debt, with the sole exception of Ferragamo which however records a very low debt-to-equity ratio and below the average for the clothing sector. Armani stands out above all with irrelevant debts compared to his own means and liquid assets which amount to 691,6 million euros at the end of 2013.
Attachments: Focus-Moda-2014.pdf
