By  on May 11, 2007

MILAN — Raf Simons' appointment as creative director of Jil Sander AG two years ago is proving to be pivotal in the turnaround of the German brand, which is on track to break even this year.

In an interview to discuss year-end financial results, Armin Mueller, chief financial officer of Jil Sander, said feedback from the market and consumers was "very encouraging," and that the brand was expanding its points of sale and its customer base.

"We added 18 new clients in one season, and sales of the fall-winter 2006-2007 collection grew 10 percent," said Mueller.

The company said that in the year ended Jan. 31, earnings before interest, taxes, depreciation and amortization rose to 4.3 million euros, or $5.8 million, compared with a loss of 19.8 million euros, or $24.9 million, in the 2005-2006 period.

"EBITDA is a fundamental indicator, a management target we set out for 2006 and delivered. In 2007, we will focus on the net position and we are close to breakeven, but we are not setting silly targets," said Mueller.

The company posted a net loss of 14.1 million euros, or $19 million, reducing its debt by 60 percent compared with the previous year.

Sales amounted to 129 million euros, or $174.6 million, a slight drop compared with 130 million euros, or $163.8 million, reported in the previous fiscal year. Dollar figures have been converted from the euro at average exchange rates.

Mueller said changes in distribution and unfavorable exchange rates affected revenues. Also in 2006, the company closed three factory outlets, relocated two flagships and closed the London boutique. The company will open a London store at another location in the fall.

Jil Sander is investing in creating a worldwide retail network, although Mueller was quick to point out the company has no intention of becoming a retailer and will continue to rely on its wholesalers as well. Retail sales account for 40 percent of revenues.

In March, the company opened a flagship in Frankfurt and three shops-in-shops in Japan. In a partnership with Bosco dei Ciliegi in July, Jil Sander will open two new stores in Russia, in Moscow and St. Petersburg, and its first accessories-only boutique in Moscow.

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