The parent company of Kappa, Robe di Kappa, K-Way, Superga and other brands has reported aggregated revenues of €556 million for the first nine months of 2016, down from €570 million in the first nine months of 2015. BasicNet's aggregated revenues include its direct sales, mostly in Italy, and those of its licensees. The commercial result, expressed in local currencies, was significantly impacted by conversion into U.S. dollars - which is the group's currency for non-euro transactions - in several countries including Sweden, Norway, Russia, Turkey, Mexico, Argentina, South Korea and South Africa.
Sales of Basic Italia, the group's subsidiary for the Italian market, and its subsidiary Basic Retail amounted to €98.9 million, down from €102.5 million in 2015. The drop in sales was mainly attributed by the group to its decision to work on better brand positioning and a streamlined customer base, which resulted in sacrificing significant amounts of sales volumes, the company said.
Brand revenues for Kappa and Robe di Kappa were in line with the previous year, but rose by 31.5 percent on the South American market thanks to the new licensees in the region becoming fully operational as well as strong commercial growth in Brazil, with the sponsorship of the Santos F.C. football team.
On the European market, the two brands were impacted by declining consumer numbers and the resulting difficulties for some licensees. In Asia, the South Korean, Indian and Vietnamese markets performed well, the company said. The Middle East and African markets were negatively affected by political instability and the depreciation against the U.S. dollar of a number of local currencies, in particular the South African rand.
The Superga brand posted a strong 28.7 percent revenue increase in the Americas, where the licensing deals recently concluded in Argentina, Chile, Colombia and Panama became operational. In Europe, Superga's sales grew in Germany and the Netherlands, while the brand's performance in Turkey and Greece was affected by political instability in the former and economic difficulties in the latter. In Italy, BasicNet restructured the brand's distribution channels and streamlined the customer base, and part of the brand's revenues were sacrificed in favor of better brand positioning, the company said.
The Asian market slowed down compared with the previous year, mainly due to the interruption of the license held by the Indian licensee following disagreements about commercial methods. Superga's sales in Asia were also affected by the slowdown on the Chinese, Hong Kong and South Korean markets, whose currencies depreciated against the U.S. dollar.
The K-Way brand's revenues grew by 4.4 percent. The brand's performance on the Asian market was particularly strong, with a 25 percent increase, thanks to the new license in Japan and stronger sales on the South Korean market. The K-Way brand also performed well in the Americas, where revenues were up by 16.6 percent.
BasicNet expects a strong commercial performance in the fourth quarter based on the order book and forecasts on royalties and sourcing commissions. This outlook, however, is subject to exchange rate fluctuations as well as consumer confidence levels, which continue to remain weak in its main markets.