By  on August 3, 2007

MILAN — Growth in all company brands and across all regions pushed Valentino Fashion Group SpA's net profits up 18.3 percent to 41.4 million euros, or $53.8 million, on an 11 percent increase in sales to 1.03 billion euros, or $1.34 billion, in the first half.

Currency conversions were made at average exchange rates for the respective periods. Sales would have grown 13.5 percent at constant exchange rate.

The Hugo Boss brand contributed the bulk of sales, growing 11.5 percent to 793.7 million euros, or $1.03 billion, while Valentino showed an 8.2 percent increase, reaching revenues of 120.7 million euros, or $156.9 million.

VFG also owns better men's wear label Lebole and holds licenses for the M Missoni diffusion line and Marlboro Classics sportswear collection. In the six months of the year, those brands grew 12.1 percent to 146.2 million euros, or $190 million.

Group operating profits grew 20.2 percent to 112.4 million euros, or $146.1 million, compared with 93.5 million euros, or $121.5 million, in the same period last year.

"The performance in the first six months of 2007, the amount of fall-winter orders and the growth of direct retailing allow [us] to forecast a 10 percent growth in the remaining part of the year and improvement of operating and pretax profits more than proportional to the growth of sales," the company said in a statement.

VFG, which is now controlled by private equity fund Permira Holding's takeover vehicle Red & Black Lux Srl, said it will hold shareholders' meetings on Sept. 20 and 21 to appoint a new board. Red & Black has bought 60 percent of VFG from the Marzotto family and other investors and is launching a bid for the remainder of the company, looking to delist VFG from the Milan Stock Exchange. Last month, following the Roman celebrations of Valentino's 45th anniversary, VFG took a 45 percent stake in the Proenza Schouler fashion label.

The group said that, in the first six months of the year, it invested 41.4 million euros, or $53.8 million, in its retailing network, opening 34 directly operated stores, and updating its computer system.Robust business in Europe and the U.S. helped boost revenues. Sales in Europe grew 12.8 percent to 716.8 million euros, or $931.8 million. In the U.S., sales rose 9.4 percent to 177 million euros, or $230.1 million. At constant exchange rates, sales would have grown 18 percent in that market. Asia and other countries showed a 4.5 percent hike in sales to 104.3 million euros, or $135.5 million, but sales would have grown 12 percent at constant exchange.

As of June 30, the group's debt stood at 453.5 million euros, or $589.5 million, compared with 407.3 million euros, or $529.4 million, on June 30, 2006.

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