Roberto Cavalli suffers 26-million-euro loss in 2016
Italian fashion house Roberto Cavalli revealed Thursday that it had suffered a dramatic 26-million-euro loss in 2016, as the colorful brand marked went through a brutal turnaround. The Florentine labelled cautioned, however, that direct sales had stabilized in the first months of the current year thanks to its re-organization efforts. Nonetheless, total revenue plunged a whopping 13.6 percent to 155.2 million euros in 2016.
In a difficult 2016 for the house, Roberto Cavalli laid off 200 staff in October out of a total workforce of 672. In the same month it fired its up-tempo designer Peter Dundas, after his hippie chic style failed to gain traction. The restructuring clearly impacted on the financial performance of the house, which has still not named a successor to Dundas.
Cavalli added in a release that these restructuring costs contributed to a net loss of 55 million euros, or a negative EBITDA (earnings before loss before interest, tax, depreciation and amortization) of the 26 million euros.
However, Chief Executive Officer Gian Giacomo Ferraris, was bullish about the future: “These results are in line with forecasts and there is no surprise. On this basis, in only two months, we have started a re-organization and re-development plan that is already producing its first results. Roberto Cavalli direct sales have already stabilized, and in fact we start to see an increase during the first quarter of this year.”
A much respected luxury executive, who joined Cavalli after playing a vital role in the turnaround at Versace, Ferraris joined Cavalli in August 2016.
“We know that there is still a long way to go but we have valid reasons on which to base our cautious optimism. Firstly, a positive net financial position for over euro 20 million and net assets worth over euro 210 million. We have assembled a new, first-class management team. And, finally, we have started to internalize potentially significant businesses, such as Roberto Cavalli Men’s clothing, Junior, Underwear and Beachwear,” said the CEO.
No news, all the same, about the most important hire: a new creative director. However, Cavalli, which has been going through an overhaul since Italian private equity firm Clessidra bought it in April 2015, confirmed a return to profitability in 2018.
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