LONDON — Profits at Stella McCartney Ltd. soared nearly sixfold to just over 1 million pounds, or $2 million, from 180,678 pounds, or $332,971, in the year ended Dec. 31, 2007.
All figures have been calculated at average exchange rates for the respective periods.
The rise came on the back of a 24 percent spike in turnover to 11.3 million pounds, or $22.6 million, from 9.1 million pounds, or $16.8 million, according to a company statement released Wednesday.
“The London store saw a dramatic increase in sales last year, and royalties from licenses with companies including Adidas, LeSportsac, and YSL Beauté grew substantially,” said Marco Bizzarri, president and chief executive of Stella McCartney.
Bizzarri added the results were on target with McCartney’s business plan and that he was expecting “very healthy progress” in the current fiscal year.
He declined to give any outlook or projections for the current year, although Wednesday’s statement flagged the risk going forward of “unpredictable market conditions.”
The statement added, however: “Management feels there are significant opportunities to increase performance through continued leverage of the existing assets of people, brand, products, range and clients.”
The latest sales and profit figures offer only a partial picture of the Stella McCartney business. The limited company is the U.K.-based division of Stella McCartney that registers sales from the London standalone store and royalties from McCartney’s various licensing deals. Wholesale sales and revenues from the designer’s stores in Los Angeles and New York are consolidated in the full-year Gucci Group accounts. Stella McCartney is jointly owned by the designer and Gucci Group.
According to the statement, the lion’s share of the company’s turnover — 7.5 million pounds, or $15 million — came from the YSL Beauté business. McCartney has two fragrances, Stella and Stella In Two, as well as an organic skin care line known as Care.
The London shop on Bruton Street was the second biggest earner with sales of 2.2 million pounds, or $4.4 million, while the remainder of turnover came from royalties from various Gucci Group undertakings.
Bizzarri, who will join another Gucci Group company, Bottega Veneta, as ceo on Jan. 1, said that 2009 would be a year of wholesale and retail expansion and striking the correct balance between the two channels. On the retail front, the company will open one directly operated store, at the Palais Royal in Paris, next month. It will also open a string of franchises with local partners over the next few months. They include units with an average selling space of 1,620 square feet in Kuwait; Tokyo’s Aoyama district; Dubai; Abu Dhabi; Jeddah, Saudi Arabia, and Qatar.
Bizzarri added Stella McCartney had also begun expanding its Organic ready-to-wear capsule collection. The line, made entirely from organic fabrics, bowed at Barneys New York at the end of last year and now sells at Harvey Nichols and all Stella McCartney stores as of this fall.
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