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Benetton Sees ’09 Profit of $166.8M

Benetton's consolidated revenues for last year saw a 3.6 percent drop to 2.05 billion euros.

MILAN — Benetton Group SpA on Thursday forecast a higher-than-expected net profit of 120 million euros, or $166.8 million, for 2009. The Italian clothing company said the growth was achieved through a strategy aimed at “improving cash generation, offsetting nonrecurring charges and the expected increase in taxes with a steep reduction in financial expenses.”

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Consolidated revenues for last year saw a 3.6 percent drop to 2.05 billion euros, or $2.85 billion, compared to 2.12 billion euros, or $3.12 billion, in 2008, hit by sluggish sales in Europe, which were counterbalanced by a growth in emerging markets, India and China in particular.

At constant exchange, sales would have declined 2.8 percent.

Dollar figures were converted at average exchange rates for the periods to which they refer.

The company is expected to release full 2009 results on March 18.

Chief executive officer Gerolamo Caccia Dominioni said the company was “satisfied with the results achieved in a difficult 2009,” and underscored how Benetton succeeded in combining “a focus on investments for development with rigorous action on costs, sourcing and support to the network,” which allowed it to sustain profitability.

Benetton said there was ongoing uncertainty “as to when and how the economy will recover, especially in the geographical areas of most interest to the group,” and that it expected “more energetic” demand in the second half of the year. Accordingly, the company plans to continue to invest in retailing, cost-cutting and improved efficiency.

In 2009, revenues generated by the textile division rose 8 percent to 102 million euros, or $141.7 million, while apparel sales dipped 3 percent to 1.94 billion euros, or $2.7 billion.