MILAN — Benetton said a higher value product offering and accelerated growth in strategic countries such as Russia and Latin America helped net profits rise 7 percent to 155 million euros, or $227.8 million, in the year ended Dec. 31.
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Sales rose 3.9 percent to 2.12 billion euros, or $3.12 billion, at average exchange rate.
The Italian clothing company also said former Bulgari chief financial officer Alberto Nathansohn will join Benetton in the same role on May 1. Bulgari said Monday that Nathansohn was leaving at the end of April, after almost three years at the company.
Benetton said 2008 figures “achieved the group’s preset objectives, despite the deteriorating international economic situation, which became particularly evident in the fourth quarter of the year.”
The firm said highlights of the year included supply chain improvements to better serve its partners and accelerate growth in strategic countries, such as the former Soviet Union, India and Turkey, and the introduction of a new organizational structure based on business units.
The growth in 2008 was further helped by the opening of 150 stores during the year. In 2008, Benetton signed an agreement with Sears Mexico to expand the United Colors of Benetton brand in Mexico, and opened new offices in Miami, which is seen as a sourcing hub to target the region with dedicated apparel collections.
In 2008, earnings before interest taxes and depreciation allowances grew 4.1 percent to 354 million euros, or $520 million. Benetton said it invested 209 million euros, or $307 million, last year, compared with 230 million euros, or $315 million, the previous year, in the expansion of its retail network, in particular in Italy, France and Spain, as well as in India, Russia and elsewhere in the former Soviet Union and Turkey. The company also invested in the logistics hub in Italy’s Castrette di Villorba and its manufacturing facility in Tunisia.
Net financial debt reached 689 million euros, or $1.01 billion, from 214 million euros, or $293 million, at the end of December 2007.
Chief executive officer Gerolamo Caccia Dominioni said the main goals in 2009, “in view of measures already initiated to contain and compensate for the negative impact of the crisis,” are to strengthen Benetton’s market share and maintain profitability. To this end, Benetton said it has put in motion “an extensive reorganization plan” that “will enable continued investment, accelerate development, limit the risks of future inflationary pressures, significantly renew the organizational structure and generate cash flow.”
This strategy will result in annual savings of 50 million euros, or $64.9 million at current exchange, from the second half of the year on.