By  on November 16, 2006

MILAN — A 40.4 percent increase in retail revenues at Gianfranco Ferré and a 45.9 percent hike in its accessories business helped IT Holding stay in the black and post double-digit growth in sales in the first nine months of the year.

The company, which controls the Ferré, Malo and Extè brands, posted a net profit of 3 million euros, or $3.8 million, compared with a year-earlier loss of 10.5 million euros, or $13.4 million.

The company started its return to profitability in the first quarter of the year.

Sales grew to 579 million euros, or $741.1 million, up 11.7 percent from 518.3 million euros, or $663.4 million, in the same period a year ago. Dollar figures were converted from the euro at the current exchange rate.

In a statement, Tonino Perna, chairman of the group, said: "The strong results achieved in the first nine months of the year and the orders received for the fall/winter 2006/2007 and spring/summer 2007 seasons allow us to confirm the previously announced expectations for the full financial year."

IT Holding attributed the expansion of its accessories business to the success of the new Plus IT franchise stores, which regroup accessories produced by the company for the D&G, Just Cavalli, Versace Jeans Couture, Versus, Extè, C'N'C' and GF Ferré brands. The Plus IT stores were launched in the fall of 2005 and now total 32 units. Accessories accounted for 17 percent of sales. IT Holding's production of young lines for the D&G, Just Cavalli, Versace Jeans Couture, Versus, Extè and C'N'C' brands accounted for the bulk of revenues — 59.7 percent, or 345.7 million euros, or $442.4 million.

Last year, Dolce & Gabbana severed its 12-year partnership with IT Holding for D&G, taking production of the diffusion line in-house. IT Holding's production contract for D&G ended with the fall 2006 season. The firm has since inked a production deal for John Galliano's new diffusion line, Galliano, starting with the spring 2007 collection.

In the period ended Sept. 30, the Ferré brand accounted for 15.5 percent of sales, or 89.8 million euros ($114.9 million), followed by Malo, which represented 6.8 percent of sales, or 39.4 million euros ($50.4 million). Malo is currently engaged in shedding its historical image as a cashmere knitwear brand and expanding it to a more contemporary collection with the help of designers Tommaso Aquilano and Roberto Rimondi of the 6267 line, tapped last summer.Geographically, Italy continued to be the group's main market, with sales growing 20.7 percent and accounting for 45.8 percent of revenues. The remainder of Europe followed, accounting for 32.1 percent of sales and showing a 5 percent growth in the period compared to the same period last year. Sales in the rest of the world grew 17 percent to 119.6 million euros, or $153 million.

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