MILAN — Higher raw material costs and lower consumer spending in the Mediterranean area dragged Benetton Group’s net profit down 28.3 percent to 73 million euros, or $101.4 million, in the year ended Dec. 31, compared with 102 million euros, or $134.6 million, in 2010.
Revenues decreased 1 percent to 2.03 billion, or $2.82 billion.
Dollar amounts have been converted at average exchange for the periods to which they refer.
To balance lackluster sales in more established markets, Benetton accelerated growth outside Europe, posting a 10 percent gain in sales in emerging countries, which accounted for 26 percent of total revenues.
Investments last year totaled 102 million euros, or $141.7 million, compared with 122 million euros, or $161 million, in 2010, focused primarily on the development of the group’s sales network, including the remodeling of a number of flagships in main capitals such as Paris, Milan and London, and openings in emerging markets such as Mexico and Russia. As of Dec. 31, net debt stood at 548 million euros, or $761.7 million, compared with 486 million euros, or $641.5 million, at the end of 2010.
In its outlook for the year, Benetton said 2012 “opened with moderately positive results in terms of direct sales in almost all countries,” also due to strong end-of-season sales. Looking ahead, the group expects a “good sales performance only in emerging and high-growth countries, with increases in consumption throughout 2012.”
Benetton also expects spring-summer orders could close “with a slight downward trend compared with the comparative collections in the previous year.”
On the bright side, the company recorded a slowdown in the price inflation of cotton, “with potential positive effects as from the second half of the year.”
However, Benetton said it was not forecasting an improvement in net and operating profit due to “the pressure on revenues” and the “increased cost of indebtedness.”
Earlier this month, Consob, Italy’s equivalent of the Securities and Exchange Commission, gave Benetton’s parent company, Edizione Srl, the green light to proceed with the tender offer to buy the 25.15 percent of Benetton shares not owned by the Benetton family at 4.60 euros, or $6 at current exchange, each. The process will run until March 30.
In February, the Benetton family said Edizione was planning to launch a tender offer and delist the Italian clothing and textile manufacturer with the goal of taking the company private. Benetton, which went public in 1986, is a small part of Edizione’s holdings that range from highway catering and communications to real estate and agriculture.
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)