MILAN — Gruppo Coin SpA, which bills itself as Italy's largest clothing retailer, swung into profitability last year after seven years of losses.
Coin said that updated retail formats and a better product assortment allowed the company to post a net profit of 10.3 million euros, or $13 million, for the year ended Jan. 31. In 2005, Coin posted a net loss of 4.5 million euros, or $5.6 million. Sales rose 5.6 percent to 1.12 billion euros, or $1.41 billion.
Dollar figures have been converted from the euro at average exchange rates for the period to which they refer.
"We think that we are at the start of a new path our group is pursuing," Coin chief executive Stefano Beraldo said at a news conference here.
Beraldo said he is upbeat about the future as like-for-like sales at both the company's Coin and Oviesse chains were up more than 5 percent in February and March. "We expect a solid improvement of our results," he said.
Coin is a midrange department store, akin to J.C. Penney, while Oviesse is a more mass market clothing retailer known for low-end adult and children's apparel. Beraldo said the company plans to spend 50 million euros, or $67 million, this year on store renovations and openings, including more than 40 Oviesse locations. Investments last year totaled 53 million euros, or $66.8 million.
In 2005, Coin unveiled a new, sleeker and more sophisticated store concept featuring bright pink accents and dedicated areas for apparel, beauty and home furnishings. Now management is turning its attention to Oviesse, by converting the stores' nondescript interiors into spaces with a warehouse feel, featuring exposed ceiling beams, white brick walls and metal clothing racks. The stores, which have been renamed OVS Industry, resemble Gap Inc.'s Old Navy stores.
Last year, Oviesse's operating profit increased 39 percent to 79.1 million euros, or $99.7 million. Sales advanced 6.8 percent to 767.3 million euros, or $966.8 million. Coin, citing research from A.C. Nielsen, said that the 300-unit Oviesse is now Italy's largest clothing retailer with a 3 percent share of the highly fragmented apparel market. About 40 of Oviesse's stores have been converted to the new design concept.Oviesse also has four stores in Russia, Serbia and Bulgaria. Eager to expand the brand internationally, Beraldo said that Oviesse should open another 10 locations in Eastern Europe and the Middle East this year.
In an effort to trade up and reach out to teenagers and young adults, Oviesse is working with designer Elio Fiorucci on two new collections. One is called Baby Angel and targets teenagers, a demographic Oviesse is missing. A second collection, Selected by Elio Fiorucci, features items by young designers that Fiorucci has personally picked out for the store.
"We want to create a pool of creativity," Fiorucci said at the news conference.
Coin, meanwhile, narrowed its operating losses to 7.3 million euros, or $9.2 million, from 16.8 million euros, or $20.8 million, the year before. Sales rose 3 percent to 349.3 million euros, or $440.1 million. It has a network of 65 stores in Italian city centers.
Fiorucci is also consulting at Coin, injecting a dose of fashion sensibility into the product assortment. As part of his partnership with the retailer, Coin will start to carry Fiorucci's existing Love Therapy line later this year. Coin, which stocks mostly private label apparel, recently picked up brands such as Guru, Miss Sixty and CK Collection, executives said.
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