Italian luxury holdings group Tod’s S.p.A. reported sales of its core footwear business slipped during the first half of the year, spurring a shift in strategy for the remainder of 2016.
Tod’s reported net profits dropped 25.6% through the first half of the year to €37.4 million ($41.8 million) from €50.3 million ($58.8 million) in the same period last year.
The company, which owns the Hogan, Fay and Roger Vivier footwear brands in addition to its namesake Tod’s brand, reported that sales in the group’s core footwear business fell 2.5% to €400.3 million ($448.3 million) during the first half of the year.
In its report, the company blamed volatile market conditions for weighing down sales, “As seen in July, half year sales results were affected by the industry environment and the volatile and uncertain markets,” said Diego Della Valle, Tod’s group chairman and CEO.
Leather goods also proved a weak spot, down 10.7% to €69.3 million ($77.6 million) through the first half of the year. In response, Tod’s is debuting a new line of handbags in October, which it claims will help to make up for softness in the first half of the year.
“As for the future, our strategy will be to focus more and more in the world of high-quality products, footwear, handbags and small leather goods,” said Della Valle.
The company reported that it is considering closing stores starting in 2017, following a painful 14.3% drop in same-store sales in the first half of the year. Della Valle said “very few” opening will be made, with exception for “special locations.” The company said it will focus on its existing distribution network instead.
“We are very satisfied with the production structure, both for its size and the quality of the people,” said Della Valle. “For the future, we are very confident that the strategic plan prepared is going in the right direction and we will obtain good results within the next year.”