MILAN (Reuters Breakingviews) – EFFETTO FERRAGNI. Chiara Ferragni’s digital magic worked on Tod’s shares. The Italian maker of $500-a-pair loafers rallied 14% on Friday as the fashion influencer was named a director. Chairman Diego Della Valle badly needs some of the Instagram star’s appeal: Tod’s sales fell 30% in 2020, and were lagging rivals even before the pandemic. But to justify the extra 135 million euros of market value, Tod’s needs to do more than borrow her name on the board.
Ferragni, who has been mulling her own IPO, can help rejuvenate Tod’s image among her 23 million digital followers. Tod’s shares were trading at a lowly 1.28 times its forward sales. Dividing the group’s new market capitalisation by that multiple suggests investors expect Tod’s to report about 840 million euros in sales this year – a year earlier than analysts were forecasting. If she can juice the top line as easily as the stock price, the Ferragni effect will be bankable. (By Lisa Jucca)
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