By  on July 30, 2007

MILAN — Improvements in operating profits and a tax rate break helped boost Aeffe's net earnings in the first half to 5.9 million euros, or $7.8 million, a 120.8 percent increase from the same period last year.

Growth in both the apparel and accessories divisions and burgeoning exports to such countries as Russia and the U.S. helped boost Aeffe's revenues to 141.6 million euros, or $188.2 million, a 12.7 percent increase compared with the first six months of last year. Currency conversions were made at average exchange rates for the period.

Aeffe SpA, which controls the Alberta Ferretti, Moschino and Pollini brands, and produces collections for Jean Paul Gaultier, was listed on the Milan Stock Exchange STAR segment for small companies Tuesday. Massimo Ferretti, chairman of Aeffe, pointed to the listing in a statement, noting the initial public offering was "successfully completed" and that it represented "a new starting point" for the company, which will allow it to become "a reference point in the luxury goods segment."

However, Aeffe's shares tumbled on their debut, falling 4.6 percent in the first day.

Commenting on the financial results for the first half, Ferretti said they "confirm what we promised to investors and we expect that the second semester will continue to show results in line with our expectations."

Earnings before interest, taxes and depreciation allowances reached 22.9 million euros, or $30.4 million, a 51.6 percent increase compared with the same period last year.

The company revealed the amount received for the sale of its 50 percent stake in Narciso Rodriguez LLC, which Aeffe USA sold to Liz Claiborne Inc. in May. Aeffe said it booked a 2 million euro, or $2.6 million, surplus value for the sale. EBITDA for ready-to-wear grew 32.4 percent to 19.1 million euros, or $25.4 million, while the footwear and leather goods division grew 163.3 percent to 1.8 million euros, or $2.4 million. The company attributed the improvement to a new business model that cuts recurring costs.

Breaking down revenues, Aeffe said the Alberta Ferretti brand grew 16.2 percent, accounting for 21 percent of sales, and that Moschino's sales rose 14.2 percent, representing 48 percent of revenues. Pollini grew 16.9 percent, accounting for 17 percent of sales. In terms of merchandise performance, Aeffe said sales of clothing grew 10 percent, reaching 115.1 million euros, or $153 million, while shoes and leather goods grew 26 percent to 35.4 million euros, or $47.1 million.Geographically, Italy remained Aeffe's main market, accounting for 39 percent of revenues, or 55.1 million euros, or $73.2 million, an 11.8 percent growth. The European market grew 20.8 percent, accounting for 21 percent of revenues. Sales in Russia rose 45.2 percent, accounting for 8 percent of sales, while the U.S. grew 9 percent, or 17 percent at constant exchange rates, accounting for 12 percent of sales. While sales in the rest of the world grew 6.5 percent, Aeffe noted a 10 percent slip in exports to Japan, or 3 percent at constant exchange rates. Japan accounted for 7 percent of revenues. Aeffe attributed the drop to Japan's difficult economy.

The IPO generated 142 million euros, or $195.4 million at current exchange.

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