LONDON — Stella McCartney Ltd. has posted its first profit — a year before the deadline imposed by its parent, Gucci Group.
On Tuesday, McCartney reported profits in 2006 of 180,678 pounds, or $368,583 at current exchange, compared with losses of 1.2 million pounds, or $2.4 million, in the previous year. Turnover last year jumped to 9.1 million pounds, or $18.2 million, from 7.3 million pounds, or $14.6 million, in the year ended Dec. 31, 2005.
When he took over the helm of Gucci Group in 2004, Robert Polet, president and chief executive officer, set a deadline of the end of 2007 for Gucci's smaller companies — including McCartney, Alexander McQueen and Balenciaga — to turn a profit.
On Tuesday, Polet told WWD: "This achievement is an important pillar for the brand and for our group as a whole, and it has been reached one year ahead of schedule.
"It is a signal that the company strategy is sound, and that once again we are exceeding the expectations of our parent company, PPR, and its shareholders. In six years, Stella McCartney has significantly developed worldwide, becoming an acknowledged brand with a strong identity and a healthy business with a brilliant future ahead," Polet said.
Gucci Group and Stella McCartney each own 50 percent of her company.
The latest sales and profit figures don't offer the full picture at McCartney, however. The limited company is the U.K.-based division of the firm. The numbers reported Tuesday only register sales from the designer's London store on Bruton Street and royalties from McCartney's various licensing deals, including fragrances, skin care, and lingerie, and pacts with partners including Adidas and LeSportsac.
The statement said sales in the London shop alone increased by 50 percent over the past 12 months.
Additional turnover and profits, from the designer's stores in Los Angeles and New York and from wholesale accounts outside the U.K. — such as Bergdorf Goodman and Neiman Marcus — are consolidated directly into the Gucci Group accounts. Gucci does not break out those figures, however.
Marco Bizzarri, president and ceo of McCartney, said the non-U.K. part of the company's business is "on target" and "profitable" as defined by Polet.Bizzarri, who has been a driving force behind the McCartney business, said the current year would be one of consolidation after the frantic brand-building of the past few years. In one year, McCartney has inked deals with LeSportsac, Target in Australia, the Lane Crawford Joyce Group and lingerie company Bendon.
"We now have a very clear strategy and positioning in the industry, although there is a lot still to do. There are huge opportunities ahead of us," said Bizzarri.
"At this point, though, we want to consolidate what we have — we've pushed a lot with sales and agreements over the past years. Of course, we're not going to turn down new and interesting opportunities, but consolidation is our first priority."
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