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Valentino Reports Decline in 2023 Sales, Profitability

CEO Jacopo Venturini said that “it’s important to note that despite this, we, as a company, maintained our positioning and awareness.”

Valentino Reports Decline in 2023 Sales, Profitability

The new Valentino boutique in London.

MILAN — As it prepares for a new phase in its history, Valentino reported a slowdown in its performance last year.

Citing a “challenging global context for the luxury industry,” the Rome-based couture house on Tuesday morning reported a 5 percent decrease in 2023 revenues to 1.35 billion euros, including impacts from changes in exchange rates. This compares with sales of 1.42 billion euros in 2022. At constant exchange rates, revenues last year were down 3 percent.

In an emailed message, chief executive officer Jacopo Venturini said that “it’s important to note that despite this [decline], we, as a company, maintained our positioning and awareness. Our shared vision, centered on client-centricity and colleague-centricity, played a significant role in this achievement.”

Direct sales, which include e-commerce, increased by 3 percent in 2023, mainly driven by solid business in Asia Pacific and Japan, while Europe experienced a challenging second half of the year. The Americas showed “encouraging signs” in the second half, the company said. Wholesale revenues dropped by 12 percent in line with the strategic rationalization of the brand’s presence in the channel.

“Our strategy of rebalancing wholesale versus retail was implemented successfully with our DOS network,” Venturini said in his emailed statement. “This allows us to provide our clients with unique emotional and immersive experiences, creating stronger brand loyalty to ultimately enhance a sense of community.”

Valentino Reports Decline in 2023 Sales, Profitability

Valentino CEO Jacopo Venturini

As a result, directly operated retail, including e-commerce, generated 66 percent of sales in 2023 compared to 62 percent in 2022.

As of Dec. 31, Valentino had 264 stores in 207 locations, of which 232 were directly operated.

Earlier this month, Valentino opened a new London flagship on Sloane Street, which has four floors in a minimalist design using the brand’s signature red color and shades of ivory and black throughout. The London store takes cues from the unit at 645 Madison Avenue in New York, which debuted last November and has backlit black marble shelves and bespoke Plexiglas modules.

The new store concept, developed in-house, was unveiled at the end of 2022 and implemented in 2023 with the opening of boutiques in Florence, Geneva and Paris on Avenue Montaigne, followed by Shanghai at Plaza 66. 

In the 12 months ended Dec. 31, earnings before interest, taxes, depreciation and amortization, including the IFRS16 impact, amounted to 314 million euros, a 7 percent decrease compared to 2022. Operating profit fell 18 percent to 99 million euros.

The company highlighted a 42 percent jump in sales of its beauty and fragrance business, licensed to L’Oréal since Jan. 1, 2019.

E-commerce, whose global internalization process was completed in 2023 and allowed the company to accelerate its omnichannel integration, accounted for 11 percent of sales. 

On March 22, WWD was the first to report that Pierpaolo Piccioli was exiting the Rome-based couture house after 25 years, citing market sources who also believed that former Gucci creative director Alessandro Michele was negotiating his contract to become his successor. This was confirmed a few days later. Michele’s first collection as creative director of the brand will bow for spring 2025 in Paris. Valentino is sitting out menswear and couture weeks in June, generally shown in the French capital.

Last July, Kering revealed it had acquired a 30 percent stake in Valentino for 1.7 billion euros in cash as part of a broader strategic partnership with Qatari investment fund Mayhoola.

Kering has an option to buy 100 percent of Valentino’s capital by 2028, while Mayhoola could become a shareholder in Kering. The new luxury partners are expected to jointly explore further opportunities aligned with their respective strategies, including potential investments beyond fashion.

Valentino has obtained the Gender Equality Certification and the house’s commitment was reaffirmed in the realm of gender pay equity, with a gender gap of less than 10 percent.