MILAN (Reuters) - Shares in Salvatore Ferragamo <SFER.MI> 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.
(Reporting by Danilo Masoni and Stephen Jewkes, writing by Giulia Segreti, editing by Louise Heavens)