Strong performances by its accessories division and core brands helped advance IT Holding's pretax profits in the first quarter, but couldn't stave off a drop in revenues incurred from the loss of the D&G license.
MILAN — Strong performances by its accessories division and core brands helped advance IT Holding's pretax profits in the first quarter, but couldn't stave off a drop in revenues incurred from the loss of the D&G license.
The Italian fashion and manufacturing group, which owns Gianfranco Ferré, said pretax earnings for the period ended March 31 grew 24.2 percent, to 14.9 million euros, or $19.5 million, compared with the same period a year ago. Dollar figures are at the average rates to which they refer.
Consolidated sales dropped 9.1 percent to 192.3 million euros, or $251.9 million. The company attributed the loss to the termination of the D&G license, which in the same period a year ago generated 36 percent of IT Holding's revenue, or 76 million euros ($99.6 million).
On a like-for-like basis, the company said first-quarter consolidated sales actually grew 41.9 percent.
In a statement, the company said it was confident about full-year growth targets, thanks to a 30 percent increase in orders for the fall 2007 collections.
"These results confirm the value of the decisions taken by management in the last period and go beyond the targets outlined in the group's business plan," said Tonino Perna, chief executive officer of IT Holding.
The company said retail expansion of +IT stores, the group's accessories-only boutiques, helped advance sales at the accessories division by 40.2 percent.
Revenue from the Ferré collections, both the designer Gianfranco Ferré line and the younger GF Ferré brand, jumped 19.2 percent.
Sales at the stable of youth-driven lines like Exté, Versace Jeans Couture, Just Cavalli and C'N'C Costume National, the latter three of which are under license, rose 43.8 percent.
By region, the company said it was bullish about the Middle East, where sales soared 45.1 percent in the quarter. Other major markets registered slight drops due to the divestment of the D&G brand.
Operating profits grew 8.1 percent, to 22.8 million euros, or $29.9 million. The company also chipped away at its net debt, reducing it by 8.2 percent, to 322.6 million euros, or $422.6 million.In the statement, Perna credited the results to investments made last year, both in IT Holding's own brands, which in addition to Ferré include Malo and Exté, and in its effort to "consolidate its leadership in the young lines market segment."
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