UNITED COLORS OF PROFIT: Benetton said cost-cutting and its decision to sell its money-losing sporting goods business lifted its first-quarter net profit 28.9 percent to $28.8 million from $21.9 million. Sales fell 0.7 percent to $512.2 million from $515.6 million. The company said sales from its casual-clothing business in the first three months of the year, excluding currency impact, rose 3.8 percent to 351 million euros, which at Monday’s historically high exchange rate of $1.16 per euro translated to $405.7 million. Benetton wrote down the value of its sporting goods business last year, forcing it to post a full-year loss. Benetton has sealed deals to sell all of its sports brands, including Rollerblade, Prince and Nordica.
UNITE, BRYLANE INK DEAL: UNITE and Brylane LP said Monday they had reached a three-year contract for employees at the catalog retailer’s Indianapolis distribution center. The agreement calls for a 9 percent wage increase over its term and includes a “strong benefit package” according to a joint statement from the union and the company. This comes a little more than three months after the roughly more than 700 workers at the facility voted in favor of the union. That vote followed a 15-month organizing campaign in which the union targeted Brylane and other fashion companies in which Brylane’s parent, Pinault-Printemps-Redoute, holds an ownership position.
GETTING FIT: French retail giant Pinault-Printemps-Redoute said Monday it would fund a $460 million capital increase for Rexel, its electronics parts subsidiary, to strengthen the group’s profits and market position. Dollar figures are converted from euros at current exchange. The capital increase is viewed as another step in PPR’s plans to shed its business-to-business activities to focus on retail and luxury. However, it set no timetable to sell Rexel. Last week, PPR said it would sell three companies specializing in the distribution of electronic security equipment. It has already shed its Guilbert office supplies division, Pinault Boix & Materiaux wood and construction supplies division and Finaref and Facet consumer credit units. PPR controls 63.28 percent of Italy’s Gucci group and is committed to buying all Gucci shares it doesn’t own next spring.
This story first appeared in the May 13, 2003 issue of WWD. Subscribe Today.