By Valentina Za
MILAN (Reuters) -Salvatore Ferragamo said CEO Marco Gobbetti would leave next month after little over three years in charge, during which time the former Burberry chief failed to stem a slide in sales at the Florentine brand.
Ferragamo, like other family-owned Italian brands, has been struggling to rejuvenate its product offering to adapt to fast-changing luxury consumer tastes.
The company has started looking for a new chief executive, it said in a statement on Monday. Chairman Leonardo Ferragamo will take on executive powers, with help from an advisory committee, once Gobbetti leaves on March 6 and until his replacement is found.
Gobbetti arrived at Ferragamo in January 2022, as the group famous for shoes worn by Hollywood stars such as Audrey Hepburn grappled with the damage wrought by the COVID-19 pandemic, which hit it harder than rivals.
The revamp, however, has proved difficult, leaving the brand to battle with falling sales as luxury demand globally cools down, especially in Asia. Ferragamo last week reported an 8.2% drop in revenues for 2024, net of currency moves, with a 19% plunge in Asia. A year earlier, in reporting a similar 8% drop in sales for 2023, Gobbetti had warned that hitting turnaround goals could take longer than anticipated.
EXIT PACKAGE
Ferragamo said Gobbetti, 66, would receive a 4.5 million euro exit package, after agreeing to waive his 2024 bonus. In October, Gobbetti had guided for a 2024 operating profit at the low end of analyst estimates. In December, Ferragamo said it would run an impairment test on its accounts based on the profit outlook and expected to book asset writedowns of between 70 million and 90 million euros in its full year results. Ferragamo said it had no further updates on its earnings to provide after last week’s sales figures. The advisory committee that will support the chairman pending the arrival of a new CEO comprises James Ferragamo, former General Manager Ernesto Greco and former CEO Michele Norsa, who will also act as special chairman advisor. Leonardo Ferragamo, one of the six children of founder Salvatore Ferragamo, took on the group chairmanship in 2021, succeeding his brother Ferruccio, the father of James, who holds the role of chief transformation and sustainability officer.
The group’s troubles over the years have fuelled talk of a potential sale, a possibility which the family has always dismissed.
The family’s holding company, Ferragamo Finanziaria, owns 54.3% of the group that went public in 2011, selling its shares at 9 euros each. Shares in Ferragamo closed down 0.8% on Monday at 7.65 euros each. The stock has lost two-thirds of its value since Gobbetti’s arrival at the start of 2022.
(Reporting by Valentina ZaEditing by Keith Weir)
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