MILAN (Reuters) - Shares in Salvatore Ferragamo (MI:SFER) tumbled on Wednesday after the luxury group's controlling family sold shares at a steep discount, sparking concern about the group's profitability.
Ferragamo Finanziaria sold a 3.5 percent stake in the Florence-based group in an accelerated book building process. Traders and a source said the sale was priced at 23.25 euros (20.42 pounds) a share compared with Tuesday's close of 24.53 euros.
At 0821 GMT shares were down 6.2 percent at 23.01 euros after failing to open in early trade.
A source close to the matter told Reuters that the move was intended to increase the free float of the company, considered too low by the family.
But a trader at a European bank questioned the timing of the operation, adding the move indicated lack of confidence by the family at a time when the group's fundamentals are not good.
"There's no CEO and they're implementing a strategy to turn the company round ... if you sell, even if it's a small stake, you're certainly not sending a sign of confidence."
Since launching a strategic plan last year to boost its appeal to a younger clientele and reverse falling sales and profitability, the group has issued a profit warning and lost Chief Executive Eraldo Poletto.
It has since battled to reverse falling sales and profitability, partly due to a clean-up of inventories.
The founding family, which now holds around 65 percent of the group, has repeatedly ruled out any idea it might sell its controlling stake.