MILAN — Valentino Fashion Group forecast an uncertain and difficult year ahead, after operating profits fell 7 percent in 2008, but remains confident in its medium-term growth prospects.
This story first appeared in the April 20, 2009 issue of WWD. Subscribe Today.
The group, which owns Valentino and Hugo Boss and operates under license Marlboro Classics and M Missoni, said on Friday that operating profits for the 12 months through Dec. 31 decreased to 248.3 million euros, or $365.3 million. VFG did not disclose net earnings.
Consolidated turnover for the year rose 3 percent to 2.21 billion euros, or $3.25 billion. Earnings before interest taxes depreciation and amortization fell 3 percent to 320.4 million, or $471.4 million, adjusted for one-off costs related to management changes at Hugo Boss and group reorganization. VFG, which was bought by private equity firm Permira Advisers LLP in 2007, did not disclose its net indebtedness, although the figure is thought to be in excess of 2 billion euros, or $2.69 billion.
Dollar figures were converted at average exchange rates for the periods to which they refer.
“The outlook for 2009 remains difficult and the group acted quickly to optimize processes and save costs where necessary,” VFG chief executive officer Stefano Sassi stated. “Notwithstanding the uncertainty of the current environment, we are confident that the breadth and strength of our brands leaves us well positioned to deliver on our ambitious growth objectives in the medium term.”
Last month, Hugo Boss, which is listed on the Frankfurt Bourse, reported a 27 percent decline in 2008 net earnings to 112 million euros, or $164.8 million. Revenues gained 3 percent to 1.69 billion euros, or $2.49 billion, boosted by double-digit increases in the Americas and Asia.
Revenues at the Valentino brand dipped 1 percent to 260.3 million euros, or $383 million, although at constant exchange they gained 5 percent, with a 19 percent increase in Asia offsetting single digit drops in Europe and the U.S. The label generated “considerable” growth in the first half of 2008, but this was offset by the “negative” performance of the retail business in the second half of the year following the gradual worsening of the international economic environment, VFG said.
Revenues at Marlboro Classics and other brands gained 4 percent to 265.8 million euros, or $391.1 million. VFG noted M Missoni posted a 27 percent increase in sales, although it did not disclose exact figures.