The parent company of Kappa, Robe di Kappa, K-Way, Superga and other brands has announced its preliminary results for 2016, ahead of the definitive results, which will be reviewed by the company's board on March 22. Amidst an uncertain international political and economic environment, the group posted aggregated sales growth, and significantly stepped up communication and sponsorship investments both in Italy and overseas to support the growth and international development of its brands.
Aggregated revenues by the group's global licensee network were up by 1.3 percent to €740 million. The group's operating result (Ebit) was down to €15.2 million, as compared to €25.7 million in 2015. Communication, sponsorship and related marketing expenses increased by 29 percent.
Commercial licensees delivered strong revenue growth, especially in the fourth quarter, when they registered a 16.2 percent jump. For the full year, revenues from commercial licensees rose by 3.1 percent to €532.7 million. Productive licensees sales dropped by 3.1 percent to €207.3 million due to de-stocking by some commercial licensees.
Sales of BasicItalia, the group's subsidiary for the Italian market, and its subsidiary BasicRetail grew by 1 percent to €135.2 million. Revenues in the American market grew by 45.4 percent while Europe grew by 2.4 percent. Meanwhile, certain Asian countries showed a slowdown due to political instability and reduced consumer spending, which impacted the respective licensee revenues.
By brand, revenues of Kappa and Robe di Kappa grew by 3.3 percent overall, boosted by a 54.4 percent increase in the American market, where a number of new licenses became fully operational, combined with the growth of more mature markets such as Argentina and Brazil. Brazil also benefited from Kappa/Santos F.C. joint brand sales, in connection with the new sponsorship deal with the football team. Santos F.C., which has nearly 3.5 million fans on its Facebook page alone, will wear the new Kombat jersey until 2018. In addition, the Nicaraguan licensee for Kappa signed a sponsorship with Nicaragua Real Esteli FC in December.
In the European market, sales of Kappa and Robe di Kappa grew especially in Scandinavia and Russia, while sales in the U.K. and the Balkan countries declined. In Asia, the two brands remained substantially stable, with growth in India and Vietnam, while Hong Kong and Thailand showed a slowdown due to political instability and a drop in tourism from China.
New distribution agreements were signed in 2016 for the Kappa and Robe di Kappa brands for Vietnam, Cambodia and Laos, Albania, Romania and the Balkan countries, as well as in the U.S. for the new “Kappa Kontroll” line, distributed from spring 2017 and which will re-interpret in street terms a number of early 80s' cult clothing items.
The Superga brand registered strong growth in the Americas, where revenues jumped by 42.7 percent. The sales increase for the brand was particularly robust in the U.S., while the licenses for the territories of Chile, Colombia and Panama became fully operational during the year.
In Europe, Superga posted a sales growth of 42.6 percent in Germany, while revenues increased by 56.3 percent in Northern Europe and by 89.1 percent in the Netherlands. In contrast, revenues in Italy were down by 10.5 percent due to the restructuring of the brand's distribution channels, which sacrificed part of the revenues in favor of better brand positioning. Slowdowns were also evident in Greece and Turkey, due to the economic instability in the former and political instability in the latter.
In the Asian market, Superga was hit by the interruption of the license held by the Indian licensee, due to disagreements on commercial methods, and the slowdown in China, Hong Kong and South Korea. During the year, new licenses were signed for the Superga brand in the territories of Costa Rica, Ukraine and Switzerland.
The K-Way brand reported a 7.3 percent sales growth. The growth was of 6.2 percent in Europe, driven by increases in the Italian, French and Belgian markets. In Asia, K-Way registered a 37.4 percent increase, with revenues boosted by the development of the Japanese market and improved South Korean sales.
BasicNet's global retail channel continued to develop in 2016, with new openings by licensees of Superga and K-Way monobrand stores. At Dec. 31, 2016, the group's sale points globally were 1,155, of which 948 were for the Kappa and Robe di Kappa brands, 170 for Superga and 37 for K-Way. In Italy the group's brand stores were 204 in total, including 113 for Kappa and Robe di Kappa, 66 for Superga and 25 for the K-Way brand.
