MILAN — Aeffe SpA plans job cuts as the Italian fashion group reevaluates its structure after losing the Narciso Rodriguez and Basso + Brooke licenses.
Company general director Marcello Tassinari said Thursday the decision to reduce costs was a result of the loss of the two licenses and the general economic downturn.
Aeffe, which controls the Alberta Ferretti, Moschino, Pollini and Authier brands and produces collections for Jean Paul Gaultier and Blugirl, is negotiating with Italian trade unions on the number of workers to be cut and the timing of the decision.
Italian unions estimated 84 of the 627 workers at Aeffe’s San Giovanni in Marignano’s plant in central Italy would be let go, sources said. Tassinari said the number has not been defined yet. Government funds may eventually pay for part of the salaries of an undetermined number of workers. The fashion group employs 1,513 people worldwide.
Tassinari denied Aeffe’s decision to shed workers was caused by fall-winter 2009 orders. He said 2008 was “satisfying” in light of the unfavorable economy. Profits at Aeffe fell 49.9 percent to 7.7 million euros, or $11.3 million at average exchange rates. Stripping out noncash extraordinary costs related to asset impairment and one-off deferred tax and liabilities in 2007, earnings dropped 25.2 percent.
Revenues edged up 0.5 percent to 294.7 million euros, or $433.6 million, largely because of gains in emerging markets such as Russia. At constant exchange and excluding the effects of the sale of a stake in the Narciso Rodriguez brand to Liz Claiborne Inc. in May 2007, sales gained 3.2 percent.
The company, which will report first-quarter results on May 16, didn’t break out volume for the Rodriguez and Basso + Brooke licenses.
“We decided to do a thorough check up, maximize performance, redefine and rationalize our processes and avoid wastes,” Tassinari said. “This led us to realize a number of employees are redundant compared to our normal [production processes].”
Aeffe continues to invest in its brands and its retail network, he added. Four stores opened in 2008, including two in the U.S.: an Alberta Ferretti boutique in Los Angeles and a Moschino store in New York. Twenty to 25 franchised stores will open in 2009.
In February, designer label Basso + Brooke inked a five-year licensing agreement with high-end Italian manufacturing company Vaprio Stile. The first collection produced and distributed by Vaprio Stile bows for fall-winter 2009.
Roberto Zanetto, chief executive officer of Vaprio Stile, said he aims to expand distribution of Basso + Brooke in the Far East and the U.S., leveraging on the “novelty” of the product. Zanetto’s goal is to reach 350 points of sale in two years, up from the 80 that carry the brand, ranging from Feathers in London and Neiman Marcus, to Ikram in Chicago, Harvey Nichols in Hong Kong and Saks Fifth Avenue in Riyadh, Saudi Arabia. Retail prices range from $740 to $1,650 for a dress and from $900 to $2,470 for a coat. Revenues for the brand were not provided.
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