MILAN — Prada Holding NV said Wednesday that its Jil Sander unit stayed in the red in 2004, even as it saw double-digit sales growth.
The news came as Prada confirmed widespread speculation it is pondering the sale of another of its labels that has seen the departure of its namesake designer, Helmut Lang. WWD reported on March 25 that three potential buyers were said to be looking at the Lang business, but Prada declined to comment at that time.
Jil Sander is shifting its fiscal year to end on Jan. 31 to coincide with that of Prada Holding, creating a onetime 13-month reporting period. For the 13 months ended Jan. 31, Jil Sander’s net loss widened to 29.6 million euros, or $37 million, and sales totaled 153.1 million euros, or $191.4 million.
All dollar figures have been converted from the euro at average exchange rates for the period to which they refer.
Jil Sander said sales for the 12-month period ending Dec. 31 rose 10 percent to 137.5 million euros, or $170.5 million, from 124.9 million euros, or $141.1 million, in 2003 on “noteworthy” retail growth in Germany and elsewhere in Europe.
Prada did not provide a net loss figure for the 12-month period to directly compare with Jil Sander’s 2003 net loss of 28.4 million euros, or $32.1 million.
In January of this year, Jil Sander chief executive officer Gian Giacomo Ferraris estimated that 2004 sales on a 12-month basis would jump 13.8 percent after losing nearly 10 percent in 2003. He said sales growth likely would slow to a single-digit increase for 2005. The company has said it wants to generate a profit at the operating EBITDA level, which includes some one-time items, in fiscal 2006.
Jil Sander blamed the 2004 losses on a combination of an adverse exchange rate environment, store operating expenses and product development costs. In a statement, the company said it expects to reduce losses in 2005 by implementing cost-control measures and an “aggressive restructuring plan” targeting production, logistics and retail.
“Last year was certainly a difficult year from the group; however, we are taking the necessary steps in terms of organizational restructuring and cost control to bring Jil Sander back to profitability,” Ferraris said in a statement. “Our goal is to continue to grow the top line through our core ready-to-wear business, but also through increased licensing revenues, widening our accessories range and selectively expanding our distribution network.”
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