The R&S Yearbook collects data from 10 of the major fashion groups based in Italy. The aggregate can therefore be considered exhaustive of the major operators in the sector, with the notable exception of the Gucci group, whose consolidated financial statements are not available as they are part of the French PPR (Pinault-Printemps-Redoute) group: its turnover 2011 is indicated at 3,8 billion euros (3,1 billion for the Gucci brand alone, 0,7 billion for the Bottega Veneta brand).
The fashion companies operated in 2011 essentially along three lines: strengthening of brands, also through effective commercial communication; enrichment of the range and quality; renewal and expansion of the network of shops. Regarding this last point, the return of a correct positioning through direct points of sale is perceived as an essential competitive lever. The main driver of growth continues to be the development of the well-to-do population in Asia, the former Soviet Union and South America, whose inhabitants tend to standardize the consumption, lifestyle and image models of Western brands as their level of life.
The fashion market, estimated at just under 200 billion. in 2011, it grew by an average of 10%, less in clothing (+8%) and in cosmetics/perfumes (+3%), more in the hard luxury component (jewellery and watches, +18% in 2011). Expectations are also of growth for the years to come, with average annual rates around 7% and with particularly positive expectations for the hard luxury segment. The Italian fashion aggregate closed 2011 on the up: sales increased by 10,1%, industrial margins by 21,9%, the net result by 25,4%. The 2011/2010 variations in turnover and mon for each group are shown in the graph below (companies are in order of variation in mon).
Five groups (Zegna, Ferragamo, Prada, Tod's and Armani) achieved double-digit increases in both margin and turnover. On the other hand, D&G and Benetton show declines; Miroglio reported a negative industrial margin in 2011. The fashion aggregate ended 2011 with profitability values up on 2010: roi went from 14,9% to 19,7%, roe from 13,4% to 16,4%. This is an important result, taking into account that the major listed Italian industrial and service groups closed 2011 with a roe of 5,5%, down by 7 percentage points on 2010 (12,5%), and a roi all '11,5% (this instead is up from 11,3% in 2010). However, the picture is differentiated for the 10 fashion groups (graph below).
Ferragamo is the group with the highest ROI in 2011 (38,1%), Prada the one with the highest ROE (33,5%). Only the Brave (Red), Max Mara and Benetton have yields of less than 10%. The Miroglio group is negative in 2011. The average employment of the aggregate is up overall by 4%, to 64.400 employees. Nominal productivity (net added value per employee) grew by 12,9% on 2010 (from 71 thousand euros to 80 thousand euros), while the unit labor cost decreased by 7,1% (from 45 thousand euros to 42 thousands). These are levels that are unmatched by those of large Italian manufacturing (the reference is always to large listed groups), whose nominal productivity stood at 2011 euros per employee in 63 (11% less than fashion) and whose per capita labor cost is equal to 47 thousand euros (12% more): it follows a ratio between net added value and labor cost equal to 1,9 times for fashion, 1,3 times for manufacturing (or, conversely, a labor cost incidence of 52,5% for fashion and 75% for manufacturing). Following are the fashion groups sorted by incidence of labor costs on net added value in 2011.
Cumulative profits in the last five years (2007-2011) reached 4,3 billion euro, against which dividends of 1,1 billion were paid, for an average payout of 26%; in three cases (D&G, Max Mara and Only the Brave) the profits made were retained in the company. The most generous payout is from Tod's (75%). Overall, the financial structure is marked by great solidity: financial debts amount to just 15,5% of equity, an improvement from 20,5% in 2010. Giorgio Armani is practically debt-free (0,3% own means). By way of comparison, in 2011 large-scale manufacturing recorded financial debts equal to 115% of its equity. The ratio of financial debts to mon fell for the fashion aggregate below the unit, to 0,8 times (it was 1,2 times in 2010). Cash and cash equivalents are equal to twice the financial debts (1,5 times in 2010).
The distant markets are confirmed as the drivers of sales. European turnover grew by 4,5% on 2010, that of the rest of the world by 17,5%. The result is even more significant in light of the strengthening of the euro against the dollar (+4,9% in 2011). The turnover achieved in Europe fell for the aggregate from 57% in 2010 to 54,2% in 2011. The projection outside Europe is particularly strong for Zegna (25,9% European sales) and Ferragamo (24,3%), while Benetton (79%), Max Mara (72%), Miroglio and Tod's (70,6%) still have a predominantly European focus. In general, the prevalence of non-European sales is associated with the best margins (roi), as evident in the graph below (companies in increasing order of European sales).
Limited to the three listed groups that present interim accounts, the first nine months of 2012 show further progress: turnover grows by 25,3% (+16,6% in Europe, +32,1% elsewhere), industrial margins (mon ) by 35,6%. The impact of industrial margins on turnover appears to have increased further from 21,5% in 2011 to 23,3% in 2012. The sales trend was supported by the depreciation of the euro which in the first nine months of 2012 lost its 8,9% on the dollar.
