DIOR COUTURE NET OFF 30%
PARIS — Christian Dior Couture reported that net profit in the first half dropped 30 percent from a year ago to $5.8 million (34 million francs).
The fashion house attributed the drop to the short-term costs incurred by steps taken to increase Dior’s control over its product range and distribution. The measures include discontinuing licensing agreements and either opening wholly owned stores or converting franchises to stores that Dior controls.
Meanwhile, the reopening of its Paris flagship on Avenue Montaigne is set for next week, after a massive redesign by architect Peter Marino.
For Christian Dior SA, the holding company that controls LVMH Moet Hennessy Louis Vuitton as well as the Dior fashion house, net profit rose 11.8 percent to $118.3 million (699 million francs) for the half.
Operating profit for the holding company rose 20.5 percent to $131.3 million (776 million francs). The company attributed this gain to the 18 percent gain in operating profits at LVMH and a reduction in financial charges.
Dior said its net income figures do not include the negative impact of the planned increase in the French corporate income tax rate. This will total $8.1 million (48 million francs) for the group and $508,000 (3 million francs) for Dior Couture.
As reported, sales for Dior Couture rose 6.6 percent in the half to about $105.9 million (626 million francs), while sales for Dior SA jumped to $3.75 billion (22.18 billion francs) for the period, compared with sales of 13.9 billion francs for the first half of 1996. This gain reflects mainly the integration of DFS sales into LVMH, which acquired control of the duty-free retailer in January. Excluding DFS, Dior SA sales would have risen 9 percent.