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People Still Aren't Coming to Tod's for Clothes

Net profits are down 26 percent in the first half of 2014.

Tod's, known for its high-end driving moccasins, has been trying to make a name for itself in other categories including ready-to-wear, with the hiring of new creative heads for both menswear and womenswear in the past six months. 

However, its expansion efforts don't seem to be paying off quite yet. Late Thursday, Tod's Group, which also includes Hogan, Fay and Roger Vivier, reported reported a 26 percent drop in net profits in the first half of 2014. Revenue dipped 2.7 percent, or 0.5 percent at constant exchange.

Revenue dropped most significantly in the apparel category -- about 5 percent -- while shoe sales dropped the least -- about 2.5 percent.

Of course, other factors contributed to the decline in sales. According to the company, China has proven a particularly challenging environment, as it has for many luxury brands during this period, stemming from a crackdown on corruption (and thus, the gifting of luxury items) there. While wholesale did well in the U.S., retail was affected negatively by the closing of two stores, including Tod's Madison Avenue flagship, which is being refurbished. Somewhat surprisingly, the group performed best in its native Europe. However, Tod's has been working to update and streamline its distribution network in Italy and claims that has had a negative impact as well.

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Still, the company has a positive outlook: Diego Della Valle, chairman and CEO of the Group, said in a statement that feedback for the fall 2014 collections has been positive and that the company expects its end of year performance to see an upswing.