MILAN — Salvatore Ferragamo posted a 7 percent jump in first-half sales and issued an upbeat forecast for the full year, citing encouraging conditions in markets such as the U.S., Japan and China.
Sales for the six months ended June 30 rose to 253 million euros, or $326.4 million. Sales were up 10 percent at constant exchange rates.
The company did not release profit figures. Dollar figures are converted from the euro at average exchange rates for the periods to which they refer.
In a phone interview from Florence, Ferruccio Ferragamo said he's optimistic for the full year, citing spring-summer orders in line with budget forecasts, encouraging feedback from a new advertising campaign and increasing momentum in key markets like the U.S. and Japan.
"I think that there are all of the elements in place to allow us to improve upon our first-half performance for the full year," said Ferragamo, adding retail sales in the U.S. as of Sept. 30 were already growing at a higher rate than the 23 percent increase seen in the first half.
Meanwhile, Ferragamo noted the company is continuing talks to sell its unprofitable Emanuel Ungaro business. He would not be drawn out on the names of potential buyers, although he said negotiations are proceeding with one individual and that a sale could take place as early as this month.
"We are finding a solution for that company," he said.
Sources are citing Silicon Valley-based venture capitalist Asim Abdullah as the likely buyer. His name circulated in the Italian press last week and he was spotted at Ungaro's fashion show in Paris. Abdullah did not respond to an e-mailed request for comment.
Ferragamo balance sheets filed with the Milan chamber of commerce show that Ungaro posted a 2004 net loss of 21.4 million euros, or $26.5 million, on revenue of 30.1 million euros, or $37.3 million.
Returning to Ferragamo's first-half figures, the group did 75 percent of its business in countries outside the euro zone. A spokesman said the firm opened nine stores in the first half, including units in Cannes, France, London, China and South Korea.
Ferragamo said store openings in China helped boost sales in that country by 48 percent, but like-for-like sales growth also grew by double digits, advancing 38 percent. On Oct. 20, Ferragamo will celebrate the 10th anniversary of its Beijing store, its first freestanding boutique in that city."It's a market that's not as big as the U.S., but it is doubling in size every two years," he said.
In the U.S., Ferragamo said the brand continues to perform better in directly controlled stores than in the wholesale channel, which is "crowded with many brands."
The chief executive was also upbeat about Japan, saying sales there grew about 6 percent in the first half.
As for product categories, total sales of women's ready-to-wear and leather accessories grew 13 percent. Revenue from men's footwear increased 11 percent. Ferragamo said strong sales of the scent Incanto Dream pushed up fragrance revenue by 55 percent. Earlier this year the company brought its fragrance distribution back in-house.
Looking ahead, Ferragamo is planning to open about nine stores in the second half of the year, including a flagship on Hong Kong's Canton Road and a new space on Faubourg-St. Honoré in Paris.
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