By  on September 13, 2007

MILAN — A positive performance of the apparel division helped Benetton increase first-half profits by 6.5 percent to 69 million euros, or $91 million, compared with 65 million euros, or $79.3 million, in the same period last year.

Well received clothing collections in the company's directly operated and franchised stores boosted sales of the Italian clothing manufacturer, which grew 10.2 percent to 990 million euros, or $1.3 billion, in the first six months of 2007, compared with 898 million euros, or $1 billion, in the same period last year. Currency conversions were made at average exchange rates for the respective periods.

In a statement issued Wednesday, the company attributed the growth mainly to a 13 percent hike in volumes compared with the first half of 2006, noting it sold 74 million outfits in the first six months of the year, and that a positive product mix helped counterbalance the impact of currency conversions.

Earlier this year, the company said the United Colors of Benetton brands for adults and children and the more fashion-forward Sisley collection had shown "accelerated" sales. Benetton has also focused on an overhaul of the Playlife activewear label into a more casual clothing line, and on the fine-tuning of its innerwear brand, Undercolors. According to the company, both projects have been welcomed by the market.

In the first half, earnings before interest, taxes, depreciation and amortization rose 14.8 percent to 151 million euros, or $199.3 million. Earnings before interest and taxes grew 20.4 percent to 107 million euros, or $141.2 million.

For 2007, the company expects an improvement in sales compared with forecasts given in the spring, growing between 7 and 9 percent, based on the performance of the spring-summer 2007 collection and the orders for the fall-winter season. EBITDA, calculated before non-recurring items, is expected to show an increase of more than 20 percent.

Investments in inventories due to a different segmentation of collections, a higher number of directly operated stores and expenses related to information technology and to the increase in production capacity of manufacturing hubs in Croatia, Tunisia and Italy weighed on Benetton's debt. The company's debt grew to 459 million euros, or $605.8 million, compared with 292 million euros, or $356.2 million, on June 30, 2006. The company said it expects its investments in 2007 to total about 300 million euros, or $396 million, and its debt to reach 450 million euros, or $594 million, by the end of the year.Benetton said its board has resolved to file a request to delist and deregister the company from the New York Stock Exchange. The statement said "the decision was made in light of the globalization process within the financial markets and of the internationalization of the Italian Stock Exchange."

It also said the company took into account the fact that volumes traded in New York are limited, and that main American shareholders trade shares mostly on the Italian Stock Exchange. Benetton said the delisting will not affect the company's business strategy in the U.S.

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