Marco Gobbetti, CEO of Salvatore Ferragamo, will step down from his position on March 6, 2025. His departure comes after more than two years at the helm, a period marked by both attempts at brand rejuvenation and persistent financial struggles. Though Ferragamo made significant efforts to reinvent its identity and reestablish itself as a key player in the competitive luxury sector, the company has faced sales declines that prove challenging to reverse. In a statement, Ferragamo’s chairman, Leonardo Ferragamo, thanked Gobbetti for his contributions, noting his work in brand evolution, product innovation, and organisational improvements.

Gobbetti’s exit was reached through mutual agreement, and Ferragamo immediately started the process of selecting a new CEO. In the interim, chairman Leonardo Ferragamo will assume executive powers, steering the company forward through its leadership transition.

Financial Struggles Amidst a Broader Luxury Slowdown

Ferragamo’s preliminary results for 2024 revealed a concerning 8.2% decline in sales, amounting to €1.04 billion. This decline reflects a broader trend across the luxury market, with major players like LVMH and Burberry also facing challenges. However, Ferragamo’s troubles go beyond the recent market slowdown; sales have been on the decline since the first quarter of 2023, well before the broader industry slowdown took effect. Despite efforts to reignite growth under Gobbetti’s leadership, Ferragamo has not yet managed to turn the corner.

Central to Gobbetti’s vision was the appointment of Maximilian Davis as creative director in March 2022. Davis, a graduate of Fashion East, brought fresh perspectives to Ferragamo’s designs, signalling a departure from the brand’s more traditional image. The full rollout of Davis’s products into stores in 2024 marks a significant milestone, but it remains to be seen whether his innovative designs will resonate with consumers and contribute to the much-needed sales recovery.

Mixed Regional Performance

Ferragamo’s sales performance varied significantly across regions in 2024. North America showed encouraging results, with a 6.3% increase in year-on-year sales for the fourth quarter. Central and South America also saw growth, with a 10.7% year-on-year rise in Q4. Japan, which is tracked separately from the broader Asia-Pacific region, reported a 3.2% increase in sales for the year, demonstrating a solid market presence. However, the Asia-Pacific region continued to pose challenges, with a sharp 18.9% decline in sales for the full year and an even steeper 24.8% drop in the final quarter. This sluggish performance in Asia was further exacerbated by weak demand in the travel retail sector, a key channel for luxury brands. Wholesale sales fell by 19.3% in Q4, contributing to a full-year wholesale decline of 21.3%.

Though Ferragamo showed signs of recovery in some regions, such as EMEA (Europe, the Middle East, and Africa), which posted a 4.5% sales increase in Q4, the overall picture remains one of regional disparities. Asia’s underperformance, particularly in the crucial luxury market of China, continued to hold the brand back from achieving broader growth.

Optimism Through Digital Innovation

Despite these challenges, Gobbetti expressed cautious optimism, particularly in Ferragamo’s digital channels. In the final quarter of 2024, direct-to-consumer sales showed resilience, increasing by 0.9% compared to the previous year. Ferragamo’s continued investment in enhancing its digital platforms, including the re-platforming of Ferragamo.com and stronger online marketing campaigns, has been instrumental in driving this growth. As luxury consumers increasingly turn to digital shopping experiences, Ferragamo’s ability to expand and refine its e-commerce strategy is critical to securing long-term relevance in a rapidly evolving marketplace.

The digital push is part of a broader strategy to increase the brand’s visibility and connect with a younger, tech-savvy generation of luxury shoppers. While the company still faces a decline in wholesale sales and challenges in certain regions, Ferragamo’s digital progress signals an important avenue for future growth.

Investing in the Customer Journey: A New Retail Vision

A significant focus during Gobbetti’s leadership was the evolution of Ferragamo’s in-store experience. In 2024, the brand undertook a complete redesign of its retail spaces, aiming to create more sophisticated, immersive environments that aligned with the updated brand image. Gobbetti emphasized the importance of enhancing the physical shopping experience, saying, “We continued to work on elevating our customers’ journeys, strengthening the retail organisation and deploying a new store concept to create a new, sophisticated in-store experience.”

As part of this initiative, Ferragamo redefined its approach to luxury retail, focusing not only on product quality but also on the emotional and experiential elements of shopping. This more personalized, multi-sensory in-store experience is intended to resonate with high-net-worth individuals who expect more than just a transaction when entering a luxury store. It’s a strategy that aligns with the growing consumer demand for experiential retail and a deeper connection with brands.

The Future of Ferragamo: A New Leadership Approach

As Ferragamo transitions to new leadership, the path ahead will depend on how well the brand can balance its rich heritage with the need to innovate. The appointment of a new CEO will be a pivotal moment for the brand, and the right leadership will need to be agile, responsive, and attuned to changing consumer behaviours. The challenge for Ferragamo is clear: continue evolving the brand while maintaining the timeless craftsmanship and Italian luxury that have defined it for nearly a century.

Looking ahead, the new leadership will need to continue Gobbetti’s work in enhancing the customer experience both digitally and in-store, while also addressing the sales performance gaps in key regions. Whether Ferragamo leans into its heritage or takes further risks with modern design and digital innovation, it must remain adaptable to stay competitive in an increasingly crowded luxury market.

Written By: Lydia Kelly

Published: 6th February 2025