By  on April 27, 1994

MILAN -- Financially ailing GFT SpA said Tuesday it expects 1994 operating profit to total about $50 million (80 billion lire) at current exchange rates, up from initial estimates of 60 billion lire and more than double the 30 billion lire in operating profit GFT reported for 1993.

In a telephone interview, GFT managing director Clemente Signoroni, elaborating on the GFT statement, attributed the improvement to strong selling for the upcoming fall-winter season, which he said maintained its year-earlier level despite the elimination of some collections. As reported, GFT last year gave up licenses for three Valentino collections and a line for Christian Dior.

The improvement in operating earnings, however, is no guarantee GFT will wind up in the black this year. The firm has yet to report final 1993 results, but it is expected that it will show a net loss of about $62 million (100 billion lire) for last year.

"As I have said before, this [GFT's net earnings in 1993] is really a question of balance sheet policy that has yet to be finalized," Signoroni said, adding that if all goes well and GFT receives a capital infusion from a new shareholder, the company could return to profit by the end of 1994.

As reported, Plaid Clothing PLC has made a bid to acquire GFT and is currently conducting due diligence.

"I can't really comment on the ownership status at this point," Signoroni explained, though he added that the full 1993 balance sheet will probably be made public in June, when the company expects to make an announcement about its new ownership.

Other elements brightening the 1994 forecast, Signoroni added, include the concentration of sales points to improve the overall quality of the sales network. Cost-cutting and a favorable exchange rate also played a role, he said.

As of March 31, GFT's total work force declined to 6,495 employees from 6,690 at the end of December 1993, the company said.

GFT also confirmed that the revenue outlook for this year is for total sales of about $870 million (1.4 trillion lire), as reported.

Signoroni said the collection GFT produces for Armani -- a high-end diffusion line for men and women called Giorgio Armani-Le Collezioni, which represents about 22 percent of the Turin-based manufacturer's total sales -- performed particularly well in fall-winter selling.GFT's new women's label, Sahza, and its European private label men's wear business also showed strong increases, Signoroni said.

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