Valentino results dragged down by pandemic
Covid-19 has pushed Valentino into loss. The Italian luxury brand, which has just published its financial results for 2020, posted an annual net loss of 127 million euros, compared to earnings of 22 million euros in the previous year. As with many of its industry peers, reduced travel and store closures related to the health crisis pulled down the results of the label, which achieved revenue of 882 million euros last year, a year-over-year decline of 28%, or 27% in constant currencies.
In particular, the company's EBITDA was cut in half, falling 51% from 298 million euros in 2019 to 146 million euros. The decline was especially steep in the first half of the year, when EBITDA was 39 million euros, a 75% fall from 154 million euros in the first half of 2019. There was something of an improvement in the second half, when the company posted an EBITDA of 107 million euros, representing 21% of revenue and a decline of only 25% compared to the same period in 2019.
Elsewhere, Valentino's EBIT came to a loss of 119 million euros in 2020. Adjusted EBIT, excluding the economic effects of impairment testing, was a loss of 62 million euros. This impairment of 57 million euros was mainly due to the closure of certain flagship stores around the world, explained the brand in a press release.
These results "highlight a sector that has been strongly penalised by the global health emergency. In this context, the brand believes that it is more essential than ever to bet more and more on creativity, human capital and personalised experiences for customers," said the luxury house, showing a certain optimism in light of the reversal in trend in its financial results that has accompanied the transition from the last quarter of 2020 to the first three months of 2021.
Owned since 2012 by Qatari investment fund Mayhoola, Valentino overhauled its management under the direction of its new CEO, Jacopo Venturini, last year. The company also strengthened its digital communication through a range of new content – from advice to games, performances and digital projects – and worked towards achieving greater omnichannel integration.
Recently, the luxury brand announced the discontinuation of its diffusion line, REDValentino, which will cease production and distribution definitively at the end of 2023, with the Fall/Winter 2023-4 season. The company also said that it will stop using fur. In line with these decisions, the brand is closing its Valentino Polar factory, a Milan-based facility employing 43 people, which was acquired by the company from former Marni owner Ciwifurs in 2017.
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