By  on February 28, 2002

MILAN -- Diversification beyond its core brands provided the bulk of the growth for Prada Group during 2001, chief executive officer Patrizio Bertelli told a Deutsche Bank analyst conference this week, as the Prada brand's expansion slowed to a trickle.

Prada, which will release its yearend figures on April 12, projected overall 2001 revenues to come in at $1.49 billion, 5.4 percent above those of 2000, but slightly lower than the $1.51 billion estimate issued in January. Dollar figures are converted from the euro at current exchange.

Prada grew about 1 percent last year, to $1.03 billion, and Miu Miu 5 percent, to $115 million. However, other brands -- including Helmet Lang, Jil Sander, Church and Charshoe -- had an aggregate increase of 21.2 percent, to $340 million during the year. The "other" category includes Fendi, results of which were consolidated for the first nine months of 2001. As reported, Bertelli in November sold his 25.5 percent stake in Fendi to LVMH Moet Hennessy Louis Vuitton for about $260 million, payable over four years.

"Prada registered a 25 percent increase per year from 1994 to 2000," Bertelli said. "One cannot imagine this growth would continue for the following 10 years, so the way to grow was to buy companies where we could develop our production and distribution know-how."

By category, accessories accounted for 38 percent of sales, apparel for 35 percent and footwear for 25 percent. Italy generated 26 percent of sales, while the rest of Europe accounted for 23 percent and the U.S. for 22 percent. The greatest contribution to sales came from the Asia Pacific region, with 28 percent of sales.

Bertelli noted that there are signs the U.S. business could be returning to its previous vigor, as sales at company-owned stores in the U.S. rose 18 percent during December and January.

Also participating in the conference was Bulgari, which had just had its "buy" rating from Deutsche confirmed, based on "above-average earnings growth prospects and its fairly defensive content compared to its peers."

Bulgari ceo Francesco Trapani said that the analyst consensus estimate for Bulgari net income of between $60.8 million and $65.2 million for 2001 "seems realistic, but the figure may be lower."To maximize profits, the company is focused on trimming costs. "We are reducing ad spending and rediscussing relationships with suppliers," Trapani said. "We are traveling less and are not hiring at the moment."

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