MILAN — Benetton attributed its lackluster first-half results to a more aggressive commercial strategy as well as the cost of opening of new stores.
In the period ended June 30, the Italian company reported a 2 percent drop in net profits to 63 million euros, or $81 million, from 69 million euros, or $84.7 million, in the same period last year as sales dropped 8.1 percent to 842 million euros, or $1.08 billion, from 860 million euros, or $1.06 billion, last year. Dollar figures are at the average exchange rate.
Investments were mostly directed to the opening of new points of sale, the company said, adding that it totaled 39 million euros, or $50.2 million, during the first half. This compares with 29 million euros, or $35.6 million, in the same period last year,
On June 30, Benetton’s debt dropped to 475 million euros, or $611 million, which compares with 568 million euros, or $697.2 million, in the previous year.
As reported earlier this year, Benetton is focused on expanding in Asia, especially in China and India. The company plans to open 40 stores in China this year, including flagships in Beijing and Shenzhen. The goal is to roll out as many as 200 stores in China by 2008.
Benetton also said its fall 2005 collection marks a new course of the company, with “an improvement of the product mix.”
This story first appeared in the September 23, 2005 issue of WWD. Subscribe Today.