MILAN — Italian watch and jewelry group Morellato & Sector SpA reported an almost fourfold increase in net profit for 2007, driven by sales of the Morellato brand, a turnaround of the Sector label and the acquisition of jewelry retail chain Diffusione Italiana Preziosi.
Net profit reached 28.9 million euros, or $39.5 million at average exchange rates, up 397 percent compared with 2006. Sales totaled 244.6 million euros, or $335.1 million, a 27 percent rise against the previous year. Earnings before interest, taxes, depreciation and amortization, and earnings before interest and taxes each grew 133 percent, to 38.3 million euros, or $52.4 million, and 26.3 million euros, or $36 million, respectively.
Confirming a WWD report in April, the company said former LVMH Moët Hennessy Louis Vuitton executive Concetta Lanciaux, who now runs her own consultancy, has joined the Morellato & Sector board, along with former Valentino chairman Matteo Marzotto.
Lanciaux and Marzotto will flank Massimo Carraro, chairman and chief executive officer of the group, in the new positioning of Morellato. The company has been raising its profile in the "contemporary luxury" arena with its new Morellato Gold line of jewels, in gold and precious stones, and a stronger fashion content.
The company controls the Swiss-made brand Philip Watch, which is celebrating its 150th anniversary this year. Since 2006, Morellato has taken control of the iconic Sector watch brand and signed licensing deals to produce watches for Roberto Cavalli, Pirelli PZero and, more recently, John Galliano. The company also produces and distributes watches and jewelry for Miss Sixty and Just Cavalli. Carraro said this year that he sees a public listing in 2010.
The executive also underscored the group's growing international expansion. There are 57 Morellato stores, including 30 in China, and the goal is to reach 80 units this year. In the next three years, the group plans to open 50 sales points in India through a joint venture with Gitanjali Gems Ltd. Carraro is also looking to open a store in New York.
The Padua, Italy-based company, which has a history of leather watch bracelets that dates to 1930, has a watch production unit in Lugano, Switzerland, and has its jewelry made by artisans in the Veneto and Tuscany regions of Italy. Watches retail between $175 and $319, and jewelry retails for $129 to $290.
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