Ferragamo's own management told analysts this week they can't tell if China is a temporary dip or something permanent. That's not exactly the line you want quoted the day before Kering reports. And we're about to quote it. Welcome to Fashion Business Daily. On today's rundown: Ferragamo's quarter slips back into decline, ME+EM shows what a mid-priced British label can do with the American shopper, and Converse, Nike's last acquired brand, turns into a real problem for the turnaround.
Eric Sylvers, writing in The Business of Fashion:
“The real problem is China and probably in Japan,” Ernesto Greco, Ferragamo executive board member, said on a call with analysts. “And to be honest, we do not, cannot understand if this is just a temporary slowdown or if it is something more durable in time.”
Here are the numbers Ferragamo reported on Tuesday. Third-quarter revenue came in at 207 million euros, down 3.5 percent at constant exchange rates and 6.2 percent at current rates. Reuters says that was a little under an Equita-cited consensus of 209.6 million. It also undoes the second quarter, when sales rose 4.6 percent and people started talking about a turnaround. So one good quarter, and back down again. The regional split is the story. Per Reuters, Asia Pacific fell 11.1 percent in the quarter and the EMEA region fell 5.2, while North America grew 2.4. Wholesale dropped 19.1 percent. Ferragamo says that's a deliberate choice to focus on its own stores and key accounts, and direct-to-consumer is now 79.5 percent of sales. But direct-to-consumer itself was only flat. Cutting wholesale on purpose is fine, if your own stores pick up the slack. Flat doesn't pick up anything. And Greco's answer on China is to roll out the red carpet for the top spenders, with more personal service and invitations to Florence. Per BoF, he says the very rich are still buying there. It's the aspirational shopper who's gone. Vogue adds two things worth knowing. Ferragamo will close some stores in Tier 3 Chinese cities and lean on e-commerce. And the CEO job is still empty. Marco Gobbetti left in February 2025 and hasn't been replaced. That's the part that gets me. Maximilian Davis is putting on shows the critics like, and Greco himself admitted, Vogue reports, that the house still has work to do turning that into store sales. That's a full-time job for a chief executive, and nobody's in the chair. Two days ago we flagged Ferragamo as one of the brands most exposed to the US, at about a third of revenue. America did grow, but only 2.4 percent, and that wasn't enough to cover Asia. Moncler reports today, and Hermès, Kering, Prada and Zegna tomorrow. If they're hearing the same thing about China's aspirational shopper, it's a sector problem, not just a Ferragamo one.
Catherine Rowe-Kosary, writing in TheIndustry.fashion:
The brand said all its US stores had been profitable in their first year of trading and delivered significant like-for-like growth in their second. Its active US customer base increased 285% between FY24 and FY26, while its VIP customer base grew 393% over the same period.
While the big Italian houses wait to see if America holds up, a British womenswear label is out there doing great business with it. These figures are ME+EM's own, for the year to January 2026. Revenue was up 29 percent to 190 million pounds, and EBITDA up 53 percent to 37 million. US revenue grew 39 percent to 65 million, a little more than a third of the business. More recent trading looks stronger. In the twelve months to September, US revenue rose 48 percent to 84 million pounds, and global revenue reached 215 million. And the stat I care about is the reorder rate. Forty-six percent of customers came back for a second order, and almost half of active customers have bought trousers. That's a product people actually want more of. No logo, no it-bag, just pants that fit. The company says that 46 percent is 25 points above the industry average. That's the company's benchmark, so take it with some salt. What's easier to check is the backing. Highland Europe has increased its stake. It led a 55 million pound round in 2022 with the US as the first target market, and ME+EM says revenue and EBITDA have more than tripled since. And it keeps building. Seven North American stores now, three more in the US by the end of this year, then Houston, a second LA store and a first permanent Paris store in the second half of 2027. It also fits the pattern from last week's Brunello Cucinelli numbers. The American spending that's showing up goes to quiet product, sold through the brand's own stores. ME+EM is one private company reporting its own figures, so it's a data point, not a trend. Still, it's a different American shopper from the one Citi's card data says is pulling back.
Phil Wahba, writing in Fortune:
Converse hit its peak in 2023, with sales reaching an all-time high of $2.43 billion. But they had more than halved to $1.17 billion last fiscal year. If its current rate of decline continues for the rest of the fiscal year, sales will fall below $1 billion for the first time since 2010.
We went through Nike's first fiscal 2027 quarter on October 10. Fortune's angle is one we didn't get to. Converse sales fell 28 percent in that quarter. Converse is about 2.5 percent of Nike's sales, but Fortune says it accounted for 20 percent of the company's decline. This is the sneaker cycle doing exactly what it always does. The Chuck Taylor is heavy, stiff, vulcanized, and right now nobody wants that shape. Meanwhile On, Hoka, New Balance and APL are all fighting over the same casual customer, and they're winning. Matt Powell, now advising BCE Consulting, tells Fortune the brand is far too dependent on one item. BNP Paribas analyst Laurent Vasilescu goes further. Writing about the quarter that ended in November 2025, he said the firm had never seen a 44 percent decline in demand for a brand, and he wouldn't be surprised if Nike sold Converse. To be clear, that's an analyst's view. Nike hasn't said anything of the kind. Nike's position is that Converse remains an important part of the portfolio. It's also the only acquisition left. Cole Haan, Umbro, Starter, Bauer and Hurley are all gone. Last month Elliott Hill said he's focused on getting Converse back to financial health, and Nike says it'll give an update at its investor day next month. That's where we'll find out whether there's a plan or just a statement. And the fix is product, not finance. Adidas kept the Samba alive by making new versions, including a slip-on. Make a Chuck that's lighter and breathes, and Powell thinks it hits big again. I agree with him. The trouble is the turnaround clock is running a lot faster than the trend cycle.
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Tomorrow's a big one. Hermès, Kering, Prada and Zegna all in one day, and maybe a name for Saint Laurent. We'll have the numbers sorted and labeled for you. This has been Fashion Business Daily, a Lantern Podcast. See you Thursday.