Stop in the growth of points of sale, slowing increases in turnover and growing affirmation of medium-sized companies: according to Fashion and Luxury Insight, this is the annual report by SDA Bocconi and Altagamma which analyzes the financial statements of international listed companies with a turnover of more than 200 million euros, a universe in constant expansion and which this year has increased to 87 units, from 79 the previous year, the balance of the international fashion and luxury market.
In other words: listed companies slow down but medium-sized enterprises do not (turnover between 1 and 5 billion), which data in hand are the ones that obtain the best results in terms of return on investments, turnover of assets, investments and, above all, cumulative growth rates. “First of all, the growth in the number of points of sale is slowing down significantly,” says Paola Varacca Capello of SDA Bocconi. “The 1% increase in store openings is the lowest since 2006 and the growth in turnover, which stands at 5,9%, is therefore entirely due to improvements in efficiency. Twenty-four companies out of 87 instead recorded a decrease in sales".
Moreover, and this is also a first time, the top of the range segment, while maintaining leadership in the parameters that measure operating performance, grew less than the rest of the sample. According to Armando Branchini, Vice President of the Altagamma Foundation, "increasing profitability, managing liquidity with great discipline and reducing the cost of capital, are the policies that Altagamma companies around the world are applying, in 2014, 2015 and also, predictably, in 2016”. A further alarm bell for the sector comes from the first data collected in 2015, which confirm slower growth and deteriorating margins.
In the high-end segment, not only the fashion companies suffer but also those of the food, beverage and hospitality sectors, which show a slowdown after years of continuous growth, according to what is explained by the Food&Hospitality Insight, the annual report by SDA Bocconi and Altagamma which, in parallel with the one dedicated to fashion and luxury, analyzes the 2014 financial statements of the sample of companies in the high-end food&hospitality sectors. The fourth edition of the annual study analyzes the performance of a selected sample of 37 listed international companies with turnover exceeding €100 million in 2014, active in the following industries: Selected Packaged Food, Food Services, Alcoholic Beverages and Hospitality.
The total turnover in 2014 of the companies analyzed recorded a slight decrease, with a -0,5% compared to the previous year, in contrast to the previous years, but with a large number of companies still capable of growing. The overall contraction in sales also impacted the return on investments (ROI), which fell from 11,8% in 2013 to 10,5% in 2014, due to lower operating margins, with the EBIT margin going from 19,5% to 18,1%, in line with 2013 and higher than previous years.
The return on investment (ROI) was also influenced by the significant investments made in previous years for operations to grow and expand the geographical range of action. The return on equity also decreased by more than 3 percentage points, from 17,7% in 2013 to 14,5% in 2014. Faced with a less positive scenario than in previous years, the companies in the sample increased their investments both through organic growth and extraordinary operations, a tangible sign of both on the international economic and market situation and on the consolidation processes underway in the sectors examined.
“The companies we monitored were able to respond to the decline in turnover with interventions on operational and financial efficiency and have intensified their efforts for future growth,” he says Massimiliano Bruni of SDA Bocconi, co-author of the report. “It should not be forgotten that within the sample a significant number of companies were able to achieve respectable results, confirming that corporate strategies and operational activities still manage to get the better of sector trends”.
