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Sunday, November 29, 2015
Luxury Has Recovered in 2010. And No Relapse is Looming
Final 2010 balance sheets and 2011 preliminary accounts show that the industry is improving, according to the "Fashion and Luxury Insight", the annual report by SDA Bocconi and Altagamma presented this morning in Milan

Financial year 2010 marked a recovery for the luxury industry, and the first 2011 semester confirms the positive trend, according to the Fashion and Luxury Insight 2011, the annual survey compiled by SDA Bocconi and Altagamma analyzing the 2010 balance sheets of the international fashion and luxury listed companies, presented this morning in Milan.

The report analyzes the balance sheets of 67 internationally renowned listed companies with sales in excess of € 200 million, while preliminary 2011 accounts were available for 48 of them.

Surveyed companies’ sales grew by 10.9% in 2010 (-5.3% in 2009, the annum horribilis for the industry) and the positive outlook is confirmed by the lively dynamics of ROI (12.4% versus 8.3% in 2009), ROE (jumped to 16.5% from 3.5% in 2009), EBIT margin (10% versus 7% the previous year) and EBITDA margin (13.6% versus 11.1%). The average cash generation declined to 8.1% of sales (11.6% in 2009), even if the weight of working capital continued to decrease, to 18.2% of sales. The average trade debtor days were unchanged at 39.

“The 2010 positive trend is confirmed, or even strengthened, by the preliminary 2011 financial data”, SDA Bocconi’s Paola Varacca Capello, co-author of the report, says, “with a single exception. The growth of investments to 6.1% of sales in 2010, from 4.9% in 2009, and the growth of core investments on depreciation to 105.2%, from 83%, suggest that the majority of the players in the industry have been intensifying investments in the development of the core business and in supporting future growth, but the first 2011 data show a decrease of the investments to 3.2% of sales. Sales, anyway, grow at increasing speed, reaching 12.4% in the first half of 2011".

“The companies’ positive performance”, co-author Giorgio Brandazza says, “are due in part to the market recovery, but are also in part the result of the last few years’ policies, aiming at operational efficiency and at a better management of the working capital”. The attention to operational efficiency was confirmed by the paltry growth in the number of stores in 2010: 2%, that is better than the 1% of 2009 but still far away from the 9% of 2008.

“Branded mass market and retailing companies in 2010 obtained a worse performance than high-end companies” Armando Branchini, secretary general of Fondazione Altagamma and co-author of the report says. “Five out of the 10 top performers in sales growth are high-end companies and among them there are the recently listed Salvatore Ferragamo and Prada. Also five out of the 10 top performers in Ebit are high-end companies, among them Prada and Tod’s”.

As in the last few years, firm dimension was crucial for performance: larger firms (sales above € 5 million) showed better ROI (15.6% versus 13.6% for firms with salesbetween €1 and 5 million and 8% for smaller firms) and better EBIT margin (13.3% versus 11.7% and 5%).

The best performing cluster was leather goods.


Parameter Average
Sales Growth 10,9%
Return on Investments (Roi) 12,4%
Return on Equity (Roe) 16,5%
EBIT Margin 10%
Asset Turnover 1,25
EBITDA Margin 13,6%
Net Cash Flow to Sales 8,1%
Gearing 0,41
Current ratio 2,56
Intangible Assets Weight 16,9%
Fixed Assets Weight 43,3%
Working Capital to Sales 18,2%
Trade Debtor Days 39
Core Investments on Depreciation 105,2%
Total Investments on Sales 6,1%

Source: Fashion&Luxury Insight, FY 2010


Company Country Cluster Sales Growth
Skechers Usa Leather Goods 40%
Richemont Eu Jewels / Watches 33%
G-III apparel Group Usa Apparel 33%
Fossil Usa Jewels / Watches 31%
Prada Ita Leather Goods 31%
Salvatore Ferragamo Ita Leather Goods 26%
Gildan Activewear Can Active 26%
Hermes Fra Leather Goods 25%
Deckers Outdoor Usa Leather Goods 23%
Columbia Sportswear Usa Active 19%

Source: Fashion&Luxury Insight, FY 2010


Company Country Cluster ROI
Coach Usa Leather Goods 47%
Hennes&Mauritz Eu Fashion retail 42%
Next Uk Fashion retail 32%
Deckers Outdoor Usa Leather Goods 31%
Gap Usa Fashion retail 28%
Fossil Usa Jewels / Watches 26%
Gerry Weber Eu Apparel 26%
Guess Usa Apparel 24%
Inditex Eu Fashion Retail 23%
Urban Outfitter Usa Fashion Retail 23%

Source: Fashion&Luxury Insight, FY 2010


Company Country Cluster EBIT
Coach Usa Leather Goods 32%
Hermes Fra Leather Goods 28%
Deckers Outdoor Usa Leather Goods 25%
Swatch Eu Jewels / Watches 24%
Hennes&Mauritz Eu Fashion Retail 23%
Prada Ita Leather Goods 20%
Tod's Ita Leather Goods 20%
Burberry Uk Apparel 20%
Dior Fra Financial Conglomerate 20%
Richemont Eu Jewels / Watches 20%

Source: Fashion&Luxury Insight, FY 2010


Company Country Cluster Cash Generation
Revlon Usa Beauty 38%
Hermes Fra Leather Goods 24%
Gildan Activewear Can Active 24%
Coach Usa Leather Goods 23%
Swatch Eu Jewels / Watches 21%
Inditex Eu Fashion Retail 20%
Tod's Ita Leather Goods 19%
Burberry Uk Apparel 19%
Hennes&Mauritz Eu Fashion Retail 19%
Richemont Eu Jewels / Watches 17%

Source: Fashion&Luxury Insight, FY 2010

Fabio Todesco
Press Office
Universita' Bocconi
Phone +39-02.5836.2331
Mobile +39-335.6429.254
E-mail fabio.todesco@unibocconi.it

Barbara Orlando
Head of Press Office
Universita' Bocconi
Phone +39-02.5836.2330
Mobile +39-335.123.1716
E-mail barbara.orlando@unibocconi.it

17.10.2011 - © Università Bocconi > print