By  on September 29, 2006

BERLIN — Escada AG reported continued gains in the third quarter of fiscal 2005-2006, with earnings before interest, taxes, depreciation and amortization climbing 13.3 percent on a 5.3 percent sales gain.

However, profits after taxes for the quarter ended July 31 fell 21.8 percent to 4.3 million euros, or $5.5 million, “merely due to the advanced collection in the third quarter of fiscal 2004-2005 of a dividend payment from an affiliated company,” chief executive officer Frank Rheinboldt said, declining to name the company. All dollar figures are converted from the euro at the average exchange rate.

Third-quarter EBITDA for the group — which, besides Escada, includes the Primera Group with its labels Apriori, Carita, Laurel and Biba — reached 13.6 million euros, or $17.4 million. Group sales hit 157.9 million euros, or $202 million, buoyed by strong sales in Europe, which gained 9.4 percent. Escada brand sales rose 5.6 percent in the quarter to 109.6 million euros, or $140 million. Rheinboldt said all three collections — Escada, Escada Sport and accessories and licenses — contributed to the gain.

“Escada is full on track to achieve is projected year-end results,” he said in a conference call Thursday. The group is estimating sales growth in the midsingle-digit percentage range, with about a 10 percent increase in EBITDA. It also expects group profit after taxes to “record a positive figure.”

Addressing the recently announced changes in Escada’s design direction, Rheinboldt said Damiano Biella, who joins the Munich fashion house Oct. 1 as creative director, will help bring a new femininity, emotionalism and internationality to the brand.

Of former design director Brian Rennie, he commented, “Brian was responsible for 12 years of success for the brand after the death of Margaretha Ley, and that’s something no one can take away from him. But the brand has too many images. It’s still a bit too Eighties or Nineties in established markets, though in new markets like Russia, Escada is seen as a younger, contemporary brand. It’s not only about the collection,” he added, “but concerns presentation to the press and at [point of sale] via visual merchandising and advertising,” all of which Biella will oversee.The long-planned modernization of the Escada stores is finally under way. The new in-store look, which Rheinboldt described as “clearly more feminine, more luxurious and with another class,” will premier in Vienna, Hamburg and Munster in October. Hong Kong, Australia, Mumbai, Peking, London and Shanghai will follow in December, and, as of January, Taiwan, Madrid, Beverly Hills and New York will be renovated. Escada has set aside between $38 million and $44.5 million for the two-year renovation program, which will take precedence over new store openings during that time. “Afterward, there will be a rollout of notable new stores,” Rheinboldt said.

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