Ferragamo's Turnaround Gets Investment Boost but Challenges Remain

Salvatore Ferragamo is an Italian monobrand company mainly known for its footwear and accessories. We believe the firm benefits from relatively strong control over distribution (almost 70% of revenue is retail, versus more than 70% for Burberry, Prada, and Gucci, but in line with Hugo Boss), while its strong representation in airport locations (about 150 travel retail stores) positions it well to benefit from growth in global travel flows and tourist luxury spending (about half of industry spending is done while travelling).