Fiscal year 2011 confirmed the good health of the fashion and luxury industry, with a growth in turnover slightly higher than that of the previous year (12,1% against 11,7%), but with a worrying outlook for 2012. This is what emerges in summary from the Fashion and Luxury Insights, the annual report by SDA Bocconi and Altagamma which analyzes the financial statements of listed international companies with turnover exceeding 200 million euros.
The profitability of the fashion industry is therefore stabilizing, highlights the report, which this year analyzes a sample of 77 companies: the average ROI is 13%, only slightly lower than the 13,4% of the previous year, even if below the pre-crisis levels, while EBITDA is 14,1% (14,3% in 2010) and the ratio between working capital and turnover stands at 18,8% (18,4% in 2010). The most evident change concerns the return on equity, which rises to a record 27,7% (18,6% in 2010), even higher than pre-crisis levels, following the sharp increase in financial leverage, with the ratio between debt and equity which went from 0,47 in 2010 to 0,76 in 2011.
"However, the first data from 2012 casts a shadow on the picture," he says Paola Varacca Capello of SDA Bocconi, co-author of the report. “We have preliminary data from 53 of the 77 companies and it's not very good: growth slows sharply, from 12,1% to 7,8%, and profitability suffers, as evidenced by the operating result, which goes from 10,1% to 9,6%”.
“Company size remains a crucial driver of profitability,” he says Emilia Merlotti of SDA Bocconi. “The largest companies, with turnover exceeding 5 billion euros, perform better than the others both in terms of return on investments and operating profit. On the other hand, however, they record lower growth rates”. Definitely, the Jewelery & Watches and Apparel segments are the best performing segments of the year, with above-average growth rates and return on investment.
“The top of the range is by far the segment in the best health”hold Armando Branchini, general secretary of the Altagamma Foundation and co-author of the report. “In clothing, for example, companies recorded a growth in turnover of 27,7% and a return on investments of 19,8%, against 11,9% and 14,7% in the medium segment and 16,6% % and 10,5% of the mass market”.
The SDA Bocconi team of authors is made up of Paola Varacca Capello, Nicholas Misani, Emilia Merlotti, Leonardo Etro e George Brandazza.
