Despite 66 % turnover drop, Versace beats expectations

Capri Holdings (Versace, Michael Kors, Jimmy Choo) has beaten analysts’ expectations in the past quarter (April to June). Turnover dropped 66 %, but analysts had feared for much worse.

Chinese demand on the rise

As strange as it may seem, with a 66 % turnover drop to 451 million dollars (380 million euros) and a loss of 180 million dollars (150 million euros), Capri Holdings still did better than analysts had expected. This was mainly thanks to a hike of 30 % in online sales.

Last quarter saw a huge resurgence of demand for Versace and Jimmy Choo in China, partly because of limits on travelling abroad, Fashion Network reports. This is less of a factor in Hong Kong and Macau, where turnover failed to follow the upwards trend.

No fashion tourists in Europe

At the other side of the coin, the fact that (mostly Chinese) tourists stayed away from Europe and Europe’s luxury fashion boutiques meant that Capri Holdings records a much weaker discovery in the Old Continent. “We’re at the peak season of where tourists would be coming to London, Paris, Milan, Florence and Barcelona, which are all very important cities where we do huge volume”, Fashion Network quotes CEO John Idol.

Capri therefore expects a turnover drop of 40 % for the current quarter and 35 % for the full year. Turnover growth and return to profit will have to wait for next year, the company says.