MILAN — In a move to bolster its corporate profile, Dolce & Gabbana has published its first-ever annual report, a glossy 51-page volume detailing the company’s financial performance, including a tripling of net income, for the year ended March 31.
This story first appeared in the March 3, 2003 issue of WWD. Subscribe Today.
The company said it is not planning an initial public offering, but it is clear the fashion house is eager to add another dimension to its image and boost its financial credibility — a move in step with last year’s appointment of industry heavyweight Gabriella Forte as Dolce & Gabbana’s U.S. president.
Cristiana Ruella, director of general affairs at Dolce & Gabbana, said the report was distributed to journalists and banks to boost the company’s image, but Dolce & Gabbana isn’t planning an IPO or seeking investors.
It is, however, planning on making the publication an annual event. “We had ways of communicating this information within the company but we wanted to do something external,” Ruella said.
The report details financial results for the year ended March 31, 2002, which show net profit growing to $25.1 million from $8.3 million the year before. Revenue rose 48 percent to $342.6 million from $231.1 million the year before. Dollar figures are converted at the current exchange rate of $1.08 per euro.
Dolce & Gabbana has since said pretax profit for the year ending March 31 should rise about 80 percent to $82 million from $45.5 million the year before, while revenue should swell 40 percent to $480 million.
Although the document lacks the detail found in the annual report of a public company, there are some salient points, including details on investments in communication and stores and the increasingly strategic importance of its younger D&G line:
The firm made $58.9 million in communication investments for the year ended last March 31 compared with $52.6 million the year before.
To expand production facilities, the company said it invested $5.9 million in the year ended March 31, 2001, up from $1.6 million in 2000.
The firm said it spent $49.3 million on its retail network for the year. Of that sum, $38 million was spent in Italy and other European countries.
There are 31 Dolce & Gabbana stores in operation, with seven more planned by the end of this month, a company spokesman said. The D&G unit has 21 locations and will add another four before the fiscal year ends.
The designers produce their clothing at a plant in Legnano, near Milan, while the company makes shoes, bags and leather goods at the Incisa Valdarno factory in Tuscany. Production investments for the year ended March 31 came to $971,000.
The Legnano plant has a current production capacity of 1 million garments per year for the main line and 3 million garments per year for ties, scarves, underwear and beachwear ranges.
Dolce & Gabbana said plant extensions will allow Legnano to double its annual clothing output, while production of the other items can be raised by as much as 20 percent without further structural modifications.
The Incisa Valdarno plant churns out 600,000 items a year and that volume could treble following the extension work that is planned for that site, the firm said.
Dolce & Gabbana said it recently renewed its license for its younger D&G line, which is produced and distributed by IT Holding SpA. The current license runs until the 2006 fall-winter collection. Since renewing the license, Dolce & Gabbana said it has organized a new organizational structure in close cooperation with IT Holding that extends to all management areas of the Dolce & Gabbana brand with an aim to improve image, raise press coverage and improve business results.
“In addition to style activities, the group is now also involved in brand management, public relations and press office operations for the D&G Dolce & Gabbana brand,” the company said.
Daniella Zannoni, who coordinated the project through Milan-based firm D&C Financial Communication, said the design house was eager to tout the business side of its operations as the company’s past public relations efforts were mostly product oriented.
“They chose a new path to give their brand a corporate image,” she said.