MILAN — Benetton Group on Thursday reported a 21.8 percent decline in net profit to 122 million euros, or $169.6 million, last year, compared with 155 million euros, or $227.8 million, in 2008.
In 2009, as the Italian clothing manufacturer focused on investments aimed at developing its network of commercial partners, strengthening service, costs and product sourcing, Benetton’s revenues fell 3.7 percent to 2.04 billion euros, or $2.8 billion, compared with 2.12 billion, or $3.12 billion, in 2008.
The company also confirmed chief executive officer Gerolamo Caccia Dominioni is expected to leave his post April 22. The board plans to then propose the appointment of Franco Furnò and Biagio Chiarolanza to succeed Caccia Dominioni, whose duties will be split. Furnò will head the commercial, product and human resources areas, while Chiarolanza will be in charge of administration, finance and control, operations and foreign business units.Prior to Benetton, Furnò worked at Gucci, Marzotto and supermarket chain Pam. Chiarolanza is a Benetton veteran, with 20 years’ experience in Italy and abroad.
During the year, the company said it increased supply chain efficiencies and reduced structural costs. The reorganization yielded cost savings of 58 million euros, or $80.6 million.
Dollar figures are converted at average exchange rates for the periods to which they refer.
The group last year invested 113 million euros, or $157 million, compared with 209 million euros, or $307.2 million, in 2008,and focused on developing its sales network mainly in Italy, Spain and France, as well as in “priority” emerging countries such as Russia, Mexico, Turkey and India. Investments in production related to manufacturing facilities in Romania, Italy and Croatia and to information technology totaled 31 million euros, or $43 million.
The company’s debt as of Dec. 31 stood at 556 million euros, or $772.8 million, compared with 689 million, or $1.01 billion, at the end of December 2008. This was achieved through a cash generation of 130 million euros, or $180 million, resulting from the company’s reduction in net working capital.
Benetton said it has negotiated a credit line of 400 million euros, or $556 million, effective from the beginning of June. This is in addition to existing credit lines of 890 million euros, or $1.23 billion.
For this year, Benetton forecast a “modest recovery in consumption” and expects an improved fall-winter season, although revenues for the first quarter are expected to be in line with the same period of 2009. The company anticipated operating profit “will be substantially stable,” thanks to strategies put in motion in 2009 and cost-cutting measures that are being launched.
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