By  on February 1, 2006

SAINT ELPIDIO A MARE, Italy — Tod's posted a 19.6 percent jump in 2005 sales as president and chief executive officer Diego Della Valle outlined a plan to focus on organic growth and careful product extension in areas like apparel and eyewear rather than acquisitions or large-scale retail rollouts.

Sales for the 12 months ended Dec. 31 jumped 19.6 percent to 503.1 million euros, or $626.6 million at average exchange, for the year. Tod's said sales would have risen 20.1 percent at constant exchange rates.

"If we don't make any mistakes over the next couple of years, our revenues will grow just as big as if we would have made acquisitions," said Della Valle, who hosted a small group of journalists at company headquarters here, near Ancona, to tour the footwear factory and discuss corporate strategy.

Tod's did not release profit figures, which are due in the spring. But the luxury goods group's chief financial officer, Emilio Marcellari, said profits should be in line with analysts' expectations for a net profit of about 8 percent of revenues. That would work out to net profits of some 40.2 million euros, or $50.1 million. Della Valle forecast double-digit sales growth for 2006.

Elsewhere, Della Valle revealed plans to expand Tod's manufacturing capabilities in Italy, open stores for acquired brand Roger Vivier and strike a licensing deal for Tod's-branded eyewear with Marcolin, a company in which Della Valle and his brother, Andrea, own a combined stake of about 50 percent.

Della Valle reiterated his commitment to keeping his production in Italy. There are plans to expand the shoe manufacturing facilities here and build a factory in Tuscany for handbags. Both construction projects should be completed by the end of 2007.

The ceo noted "extremely high interest" in the Vivier brand. Vivier's London store is set to open in a couple of months on Sloane Street; a store on New York's Madison Avenue should open in September, and the company is scouting locations in Milan, hoping to open a unit there by February of next year. Della Valle said he doesn't rule out the possibility of a fragrance license for Vivier, but no deal is near.

Geographically, sales rose in every market. Revenues from Italy increased 18 percent to 241.4 million euros, or $300.6 million, while those in the rest of Europe advanced 15.2 percent to 134.4 million euros, or $167.4 million. Della Valle noted a logistical snag on deliveries hurt 2004 sales in the United States, but sales have since rebounded, growing 13.7 percent to 57 million euros, or $70.9 million, in 2005. Revenues from Asia and the rest of the world grew 42.1 percent to 70.3 million euros, or $87.5 million.Tod's has been trying to boost its profile in Asia. In 2005, the company opened 15 stores in the region through franchising agreements, four of them in China. As of Dec. 31, Tod's had 105 directly operated stores and 46 franchise boutiques around the world. Tod's said same-store sales at its directly owned retail network grew 13.6 percent in 2005, accelerating in the last two months of the year.

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