MILAN — The going just got a whole lot tougher for IT Holding SpA.
On Thursday, the Italian fashion group forecast an 8 percent drop in full-year revenues and a lower profit margin, after a net loss of 10.1 million euros, or $15.4 million, in the first nine months of the year, compared with earnings of 6.6 million euros, or $8.9 million, in the same period in 2007.
Revenues through Sept. 30 fell 7 percent to 468 million euros, or $712.5 million, while earnings before interest, taxes and depreciation dropped 16 percent to 83.2 million euros, or $126.7 million.
Dollar figures were converted at average exchange rates for the periods to which they refer.
IT Holding chairman and chief executive officer Tonino Perna said the results were “strongly influenced by the negative economic situation, which has directly affected all the markets in which we are present,” leading to a slight drop in orders of the fall-winter 2008 collection.
He added “the difficult situation and the result of orders of the spring-summer 2009 collection” led to the lower full-year revenue forecast and an estimated EBITDA margin of between 15 and 16 percent.
IT Holding, which owns the Gianfranco Ferré and Exte brands and operates under license the Just Cavalli, C’N’C Costume National and Galliano labels, did not break down revenues by brand.
As of Sept. 30, IT Holding’s net financial indebtedness improved to 295.4 million euros, or $428 million, from 352.4 million euros, or $502.9 million, at the same point in 2007, due to a reduction in working capital.
The group’s parent company, PA Investments SA, is also laden with around 140 million euros, or $175.6 million, in debt, although Perna, who holds nearly 61 percent of PA (and a further 1 percent via GTP Holding SpA, a separate holding company for PA), is in negotiations to sell a minority stake to a firm represented by Hong Kong-based businessman Billy Ngok.
In Thursday’s statement, the company said the current state of those negotiations was such that no further information can be provided for the time being, following reports that any deal might not be done until the spring.
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