Italy's Ferragamo raises prices by 5-7 per cent to stem Covid-19 impact

A sign describing safety precautions is displayed in the window of a Salvatore Ferragamo store in New York City.
A sign describing safety precautions is displayed in the window of a Salvatore Ferragamo store in New York City.PHOTO: AFP

MILAN (REUTERS) - Salvatore Ferragamo has raised prices for a string of its luxury goods by 5 per cent to 7 per cent to stem a fall in revenues and profits due to the slump in demand during the coronavirus crisis, the Italian fashion group confirmed on Wednesday (July 15).

The changes, which will be applied in all regions, have not been announced by the company but a spokeswoman confirmed information from a source with knowledge of the matter.

The move follows similar steps by other luxury brands and is aimed at "mitigating the contraction in store traffic and the increase in logistics and retail management costs caused by the pandemic," the source said.

The coronavirus emergency has complicated management efforts to turn around the leather good maker, which last year returned to sales growth for the first time since 2015.

In the first three months of 2020, Ferragamo's sales fell by nearly a third and the group is expected to give an update on the sales trend of the second quarter on July 28.

Two weeks ago, Prada's chief executive officer Patrizio Bertelli said that mounting costs had forced the company to hike prices by a single-digit percentage.

The Italian brands have joined rivals such as Gucci, Louis Vuitton and Chanel in increasing price lists to limit the impact of the lockdown measures and of the slowdown in tourist traffic caused by the epidemic, which are severely affecting results of the whole industry.