MILAN — Four months after it revealed plans to go private, Benetton Group said Tuesday it will delist from the Italian Stock Exchange as of May 31.
This story first appeared in the May 16, 2012 issue of WWD. Subscribe Today.
In its last public set of financial results, which refer to the first quarter of the year, the Italian apparel manufacturer and retailer noted that increased costs of raw materials, such as cotton and wool, and slow economies in the group’s main markets, such as southern Europe, hurt its bottom line. In the three-month period ended March 31, the group’s net profit dropped 48 percent to 10 million euros, or $13.1 million, from 19 million euros, or $26.6 million, in the first quarter last year.
Revenues fell 5.5 percent to 428 million euros, or $560.6 million, compared with 453 million euros, or $634.2 million, in the same period in 2011.
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Biagio Chiarolanza, the group’s chief executive officer for operations, foreign business units and finance, said this “unsatisfactory result” was in line with expectations. “We know that the repositioning will not be easy, and the first quarter results confirm that. Nonetheless, the process is under way and will continue with determination, even though, with the economic crisis affecting the principal markets for our products, a rapid recovery cannot be expected,” remarked Chiarolanza.
Operating profit fell 64.3 percent to 12 million euros, or $15.7 million, “impacted by a large reduction in structural costs, which was offset by a cost increase of direct sales, following the takeover of stores previously operated by third parties, and reduction in some extraordinary income,” said the company. Nonrecurring costs associated with the delisting also hit the performance.
Benetton’s parent company, Edizione Srl, said last month that it considered the result of the tender offer to buy the 25.15 percent of Benetton shares it did not already own, launched on March 5 and ended on March 30, “satisfying.” Shares were priced at 4.60 euros, or $5.92 at current exchange. Edizione now holds more than 95 percent of the group’s shares, and trading will be suspended on May 28, 29 and 30, after 26 years on the Milan Stock Exchange.
Also marking the delisting, Luciano Benetton, cofounder and chairman of Benetton, said last month that after 47 years, he was passing the baton to his son Alessandro, who was previously executive vice chairman.
In the first quarter, the group invested 34 million euros, or $44.5 million, mainly in revamping stores, compared with 27 million euros, or $37.8 million, in the same period last year.
As of March 31, net debt stood at 687 million euros, or $900 million, compared with 534 million euros, or $747.6 million, at the end of March last year.
Looking ahead, Benetton said 2012 “started with positive results in respect of direct sales in nearly all countries,” where the group’s brands are available.
Orders for spring ended in line with expectations, with a 3.3 percent decline compared with spring 2011. Benetton expects a similar trend for the fall season.
The group said it will continue to strive to optimize costs efficiently, but, “due mainly to pressure on revenues,” it does not expect improvements in operating profit, and foresees a slight drop in net profit resulting from an increased cost of debt.