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Dior’s Income on the Rise

Demonstrating accelerating profitability, Christian Dior said Friday its 2004 operating income is forecast to rocket 25 percent to 50 million euros.

PARIS — Demonstrating accelerating profitability, Christian Dior said Friday its 2004 operating income is forecast to rocket 25 percent to 50 million euros, or $32.2 million at current exchange.

The French fashion house, which unveils its summer couture collection here today, also cited robust holiday sales, with fourth-quarter revenues rising 11.6 percent to 163 million euros, or $210.3 million. The increase would have been 16 percent excluding currency fluctuations.

Dior cited strength across all geographic regions and credited the “creativity and success of collections” by its trio of designers: John Galliano for women’s, Hedi Slimane for men’s and Victoire de Castellane for fine jewelry. “December was good in all categories,” said Dior chief executive Sidney Toledano. “And the trend is good for the beginning of the year.” He noted that January has started off strongly with sales of Galliano’s spring ready-to-wear and handbags, particularly logo styles festooned with vintage-style embroidery.

For the full year, Dior sales totaled 595 million euros, or $767.6 million, a 14 percent increase on a reported basis, or 18 percent in constant currency terms. Sales in the U.S. and Asia were strongest, ahead 40 percent in local currencies, Toledano said. Europe, which has been sluggish, posted a double-digit gain, he added.

French companies report sales and earnings separately. Dior said its audited financial results would be presented to its board for approval in March.

Dior ended the year with 184 wholly owned boutiques, up from 159 at the end of 2003. And the firm plans to keep up the pace, with about 20 openings planned for 2005, including major locations in Osaka, Japan, and Las Vegas in the first half.

Toledano said a weak U.S. dollar looms as the main challenge on the horizon; however, he said Dior is banking on double-digit sales growth for 2005, and more advances in profitability. He noted the brand has yet to experience price resistance due to currency fluctuations.

The fashion house is gunning to reach 1 billion euros in sales by 2007. The Dior perfume and beauty business, which is part of the LVMH Moët Hennessy Louis Vuitton constellation of companies, already generates more than that.

Meanwhile, Christian Dior SA, parent company of LVMH and the Dior fashion house, said consolidated 2004 sales reached 13.21 billion euros, or $17.04 billion, representing an increase of 11 percent in organic terms and largely in line with the results posted by LVMH last week.