Ferragamo's China Business Is Growing, But Ready-To-Wear Is Not

Revenue from China grew 20 percent this year.
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Eliza Brooke
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Revenue from China grew 20 percent this year.
Getty

Getty

The reports are in, and it looks like the luxury-hungry Asia Pacific market still has an appetite for Salvatore Ferragamo. Revenue from the region grew 10 percent over last year -- less than the 17 percent increase the luxury company reported in 2012, but still impressive. The region now accounts for more than a third of Ferragamo's total sales.

China is a bright spot for the company, showing 20 percent growth this year. (Compare that to an increase of just 1 percent in Japan.) The country has been on the rise for Ferragamo in the last few years, clocking 44 percent growth in 2011 with 60 monobrand stores in 34 mainland cities.

That compares to a 13 percent increase in Europe, 12 percent in North America and 15 percent in South America. Overall, the luxury brand's sales rose 9.1 percent in 2013, totaling $1.65 billion.

According to Ferragamo Group, much of the company's growth this year stems from footwear, handbags and leather accessories: Together, those areas make up more than 76% of Ferragamo's business.

Ready-to-wear, on the other hand, is not doing so hot -- or at least not getting any hotter. The category flatlined this year, the only one to do so. As of Sept. 30, RTW represented only 8 percent of total revenue. Given that we can very easily picture the shoes and handbags in Ferragamo's stores right now but not the clothes, we can't say we're surprised.