MILAN — Just days before Gucci Group is expected to report a double-digit drop in first-quarter net profits, the company Friday announced that it has granted chief executive Domenico De Sole additional stock options and has acquired the remaining 35 percent of its operations in Singapore and Malaysia that it did not already own.

De Sole, who, along with Gucci creative director Tom Ford, is renegotiating his employment contract, has been granted options to buy another 250,000 shares in Gucci, according to the company’s June 16 filing with the Dutch stock market regulator. The new options come on top of the 1.4 million De Sole already holds.

The most recent batch of options results from a contract clause established back in 1999. De Sole, Gucci and its majority shareholder, Pinault-Printemps-Redoute, inked a four-year contract that expired in March 2003. There was a one-year extension clause, which was exercised and keeps De Sole at Gucci until March 2004. The packet of stock options was part of the extension transaction.

The catch in the new options is their strike price which, at $128 a share, is higher than both the current price of the stock — which closed on the New York Stock Exchange Friday down 4 cents to $97.97 — and the sum PPR must offer when it buys all outstanding Gucci shares next spring. That move will likely delist Gucci from the New York and Amsterdam stock exchanges.

(As reported, under the original terms of a deal stipulated in 2001, PPR was obligated to offer $101.50 per Gucci share, but that price will now come down. Gucci issued an exceptional dividend in May of 13.50 euros per share and once Gucci and PPR have fixed a euro-dollar exchange rate, the amount of the dividend will be subtracted from the $101.50. At the current exchange rate, the dividend is worth $15.39.)

As for Ford, whose contract also expires next year, he made about $38 million in April and May of this year by buying and selling shares in Gucci. He exercised about half of his four million stock options in Gucci Group between April 7 and May 5.

Meanwhile, the market is bracing for a weak set of first-quarter numbers from Gucci come Wednesday. It is also anxious for clues as to whether De Sole and Ford will stay at the company amid continuing speculation that there is tension between the two men and PPR. As reported, De Sole and Ford say they will stay only if their managerial and creative autonomy are kept intact.Gucci’s net profit for the three months ended April 30 will likely drop about 28 percent to $29.5 million, according to an average of six analysts’ estimates. Dollar figures have been converted from the euro at current exchange. In local currency terms, profits are expected to total 25.8 million euros.

Sagra Maceira de Rosen, an analyst with JP Morgan in London, said she thought Gucci’s first quarter should be the worst of the year, with the negative impacts of the Iraq war and SARS at their worst.

“De Sole has always said that it will be the second half of the year when we’ll see an improvement,” she said. “I’m still looking for a nice recovery in the second half of the year.”

Gucci’s consolidated sales are seen falling about 2.4 percent to $678.88 million, or 594.1 million euros. Revenue growth from the group’s acquired brands, such as Yves Saint Laurent and Bottega Veneta, is seen partially compensating for an estimated dip of 8.56 percent in Gucci brand sales.

CIC Securities analyst Francoise Etienne said in her research that the Gucci brand “will be heavily hit” by currency impacts, but she also noted that competing brands like Christian Dior and Louis Vuitton have done a better job of product innovation to get customers into the store.

Merrill Lynch analyst Paola Durante expressed similar concerns regarding the core Gucci brand. “We believe that many investors continue to worry about Gucci division performance, particularly in leather goods,” she said in a note. “Any news here can drive confidence on the group’s future prospects.”

Elsewhere, Gucci said Friday that it bought the 35 percent it didn’t already own of its Singapore and Malaysian subsidiaries, Gucci Singapore Pte Ltd and Gucci Sdn Bhd, respectively, for a total of $3.7 million, or 3.2 million euros. Gucci bought the stakes from its former joint venture partner, F.J. Benjamin Holdings Ltd.

Gucci currently has five shop-in-shops in Singapore and two in Malaysia.

“Southeast Asia is a very important region for our industry, and Singapore and Malaysia are increasingly exciting centers,” De Sole said in a statement. “The acquisition of full control over our operations there indicates our commitment to further develop the Gucci brand in markets which we believe have good potential for future growth.”Gucci’s net profit for the three months ended April 30 will likely drop about 28 percent to $29.5 million, according to an average of six analysts’ estimates. Dollar figures have been converted from the euro at current exchange. In local currency terms, profits are expected to total 25.8 million euros.

Sagra Maceira de Rosen, an analyst with JP Morgan in London, said she thought Gucci’s first quarter should be the worst of the year, with the negative impacts of the Iraq war and SARS at their worst.

“De Sole has always said that it will be the second half of the year when we’ll see an improvement,” she said. “I’m still looking for a nice recovery in the second half of the year.”

Gucci’s consolidated sales are seen falling about 2.4 percent to $678.88 million, or 594.1 million euros. Revenue growth from the group’s acquired brands, such as Yves Saint Laurent and Bottega Veneta, is seen partially compensating for an estimated dip of 8.56 percent in Gucci brand sales.

CIC Securities analyst Francoise Etienne said in her research that the Gucci brand “will be heavily hit” by currency impacts, but she also noted that competing brands like Christian Dior and Louis Vuitton have done a better job of product innovation to get customers into the store.

Merrill Lynch analyst Paola Durante expressed similar concerns regarding the core Gucci brand. “We believe that many investors continue to worry about Gucci division performance, particularly in leather goods,” she said in a note. “Any news here can drive confidence on the group’s future prospects.”

Elsewhere, Gucci said Friday that it bought the 35 percent it didn’t already own of its Singapore and Malaysian subsidiaries, Gucci Singapore Pte Ltd and Gucci Sdn Bhd, respectively, for a total of $3.7 million, or 3.2 million euros. Gucci bought the stakes from its former joint venture partner, F.J. Benjamin Holdings Ltd.

Gucci currently has five shop-in-shops in Singapore and two in Malaysia.

“Southeast Asia is a very important region for our industry, and Singapore and Malaysia are increasingly exciting centers,” De Sole said in a statement. “The acquisition of full control over our operations there indicates our commitment to further develop the Gucci brand in markets which we believe have good potential for future growth.”

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