February 3, 2017 / 4:43 PM / in 9 months

UPDATE 1-Italy's Ferragamo aims to grow revenue at twice market rate

(Adds details and quotes)

By Giulia Segreti

MILAN, Feb 3 (Reuters) - Italian luxury fashion group Salvatore Ferragamo plans to grow revenue at twice the market rate from 2017-2020, backed by a drive to improve performance at existing stores and updates to its product ranges, it said on Friday.

Eraldo Poletto, who took over from long-serving CEO Michele Norsa in August, said he aimed to “deliver a refreshed, more contemporary brand aesthetic” with the company’s three newly-appointed designers.

“The brand is there, we need to wake it up a bit, and make it louder,” he said in his first strategy update as CEO.

Poletto did not refer to a specific market growth rate, saying that was “a moving target”. Consultants Bain & Company expect the luxury industry to grow by 1-2 percent in 2017, and a further 3-4 percent in the years up to 2020.

High-end brands have been struggling with a slowdown in their biggest market, China, as well as a drop in tourist spending in Europe following a series of deadly attacks.

Florence-based Ferragamo almost doubled revenue in the six years to 2015 and its net profit rose threefold. But last year sales rose just 1 percent and were down 2 percent at constant currencies.

Ferragamo would not raise prices, but aimed to make its stores more profitable, raising sales per square metre at its 683 boutiques worldwide, Poletto said.

One analyst, who declined to be named, said the revenue target was ambitious and above the market consensus forecast, while the drive to improve store efficiency was “positive”.

At 1625 GMT, Ferragamo shares were up 1.1 percent at 26.53 euros.

Finance chief Ernesto Greco, set to leave the company in mid-March, said that unlike the past, opening new stores would not be a strong driver of growth, adding Ferragamo did not plan a large number of store closures either.

$1 = 0.9309 euros Reporting by Giulia Segreti and Claudia Cristoferi; Editing by Mark Potter

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