By  on November 10, 2006

MILAN — Valentino Fashion Group SpA posted double-digit growth in the first nine months of the year on swift sales of accessories and women's wear.

Net profits for the nine months ended Sept. 30 increased 21.1 percent to 91.9 million euros, or $114 million. Revenues rose 13.8 percent to 1.58 billion euros, or $1.96 billion. Dollar figures have been converted from the euro at average exchange rates for the period to which they refer.

"The good results achieved lead us to confirm full-year sales growth in line with the first nine months and even higher improvement for both operating and pretax income," Valentino FG chairman Antonio Favrin said in a statement. "The development of our business, particularly of women's wear and accessories collections, both for wholesale and retail, will allow us to reach new positive growth targets in 2007."

Meanwhile, there is plenty of speculation surrounding the company, both on the corporate and creative fronts. Over the past few months, members of the Marzotto family, including Valentino chairman Matteo Marzotto, have been reorganizing their individual Valentino FG stakes into a new company, called International Capital Growth. Those moves have prompted speculation the family could be mulling a sale of the company either in its entirety or piecemeal.

A Valentino FG spokesman declined to comment on any changes within the company's shareholding structure. "We are continuing to develop our brands and we're focused on their growth," he said. "We are not selling anything."

PPR chairman François-Henri Pinault's recent comments that the French luxury goods and retail group is mulling Italian acquisitions prompted plenty of chatter here. Speculators tapped Bulgari as the most likely acquisition candidate for PPR, but the jeweler reiterated that it is not for sale.

Valentino also is facing the potential retirement of its 74-year-old creative director, Valentino Garavani. The fashion house is starting to prepare for the designer's 45th anniversary show in Paris next year, and there's talk, both inside and outside the company, that it could be his last runway bow. The company has repeatedly declined to comment on the speculation.

"[Garavani] will decide for himself when he wants to reduce his responsibilities," Matteo Marzotto told WWD in September. "Right now, it's not the order of the day."Returning to the nine-month numbers, Valentino FG noted that sales of both women's wear and accessories were particularly strong, growing 34 percent and outpacing overall growth at the company.

Nine-month sales rose in every market. Revenues in Europe, the company's largest market by far, grew 13.6 percent to 1.11 billion euros, or $1.38 billion. Sales in the Americas advanced 19 percent to 255.6 million euros, or $316.9 million, while those in Asia increased 10.1 percent to 139.5 million euros, or $172.9 million.

In terms of brands, nine-month sales at Hugo Boss grew 14.4 percent to 1.22 billion euros, or $1.51 billion, while EBIT increased 13.4 percent to 188.3 million euros, or $233.49 million. Valentino revenues advanced 15.7 percent to 180.2 million euros, or $223.5 million, and the fashion house's EBIT rose 33 percent to 24.6 million euros, or $30.5 million.

Valentino FG also owns better men's wear label Lebole and holds licenses for the M Missoni diffusion line and Marlboro Classics sportswear collection. Together, these brands' nine-month sales rose 10.7 percent to 230.4 million euros, or $285.7 million, while their EBIT grew 32.7 percent to 19.5 million euros, or $24.2 million.

In terms of the third quarter, net profits rose 9.6 percent to 57 million euros, or $70.7 million, while sales advanced 13.8 percent to 649.6 million euros, or $805.5 million.

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