EUROPEAN RESULTS OUTLOOK
Gucci: Profits in 2001 fell 17.3 percent, to $278.4 million as sales gained 1.2 percent to $2.28 billion, but Gucci Group chief executive officer Domenico De Sole viewed the results not only as better than expected but also as proof of the company’s discipline and the wisdom of its acquisition record. Looking to 2002, De Sole said Gucci division revenues would be “at least” equal to those of 2001, reaching $1.5 billion, with group revenues about $2.38 billion.
Pinault Printemps Redoute: The distribution conglomerate controlled by French tycoon Francois Pinault maintains “conservative assumptions for 2002,” according to chairman Serge Weinberg. Weinberg has recently indicated that sales in America have improved moderately but that Europe has been dragging behind. PPR, which owns 53 percent of Italy’s Gucci Group, reported a 1.9 percent slide in net income for 2001, to $662 million.
Hermes: Confidence reigns on at Hermes, which continues to buck the trend in the luxury sector. While many companies reported a decline in net income last year, Hermes’ leapt 15.3 percent to $177.5 million. For 2002, Hermes believes “sales are likely to continue to grow, thanks to the considerable potential of the group image, success of the ‘Hermes House’ in Tokyo and the expansion of the store network.” Hermes will open seven new stores this year.
LVMH Moet Hennessy Louis Vuitton: Luxury titan Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton predicts a “soft recovery in the second half.” Last year, company profits tumbled 98.6 percent to $8.7 million. LVMH has indicated that sales for January and February had increased 9 percent. The company is streamlining operations — it said it could unload champagne brand Pommery and it has already divested itself of auction house Phillips — to generate cash and sharpen its focus.
Hennes & Mauritz: First-quarter earnings almost doubled to $74.7 million on global sales growth of 16.7 percent to $1.1 billion. “It is very gratifying that we have had such a good start to the year,” said chief financial officer Leif Perrson. Looking to the second quarter, H&M plans to open 26 new stores, with seven in Germany, six in France, and two each in the U.K, the Netherlands, Belgium, the U.S. and Austria. One store each will be opened in Norway, Denmark and Finland, and approximately 90 new stores by yearend.
Inditex Group: Led by its Zara division, the Spanish giant shrugged off the global economic slowdown to report earnings swelled 31.3 percent to $296.4 million on sales of $2.83 billion. During 2001, Inditex expanded its worldwide reach, launching stores in the new markets of Luxembourg, Ireland, Iceland, the Czech Republic, Jordan and Puerto Rico, and will launch another 200 to 250 stores in 2002.
IT Holding: The parent firm of Ittierre and Romeo Gigli saw earnings fall 81.1 percent from their 2000 level to $870,000 as sales rose 21.7 percent to $458.4 million. With the acquisition of Gianfranco Ferre SpA, the company said it “has now developed the financial and industrial conditions to integrate the designer’s maison, creating value for its shareholders.”
Giorgio Armani: A spokeswoman for Giorgio Armani said that the first quarter of 2002 was off to a very good start. At the end of last year, she said, business was slow in the U.S for obvious reasons, but in the first quarter of 2002, it had already picked up again and essentially in line with the same period of last year. “We expect overall yearend consolidated net revenues to increase at least 20 percent,” she added.
Prada: Sales in Prada’s directly operated stores are quickly picking up, said a company spokeswoman. “In this first quarter, Europe is essentially in line with last year; the Far East is underperforming, whereas the U.S and Japan are performing very well and registering strong growths,” she said.
Tod’s: After reporting 2001 earnings that very nearly doubled those of the prior year, Gruppo Tod’s SpA chief executive officer Diego Della Valle said he was “comforted by the company’s performance in the first months of 2002, I’m faithful that the group has all the premises to grow even this year without forgetting the unfavorable economic situation.”
Fin.part: Chairman Gianluigi Facchini said 2002 bookings for the company’s sportswear division, which includes Moncler, Henry Cottons, Marina Yachting and Cerruti Jeans, were up more than 20 percent over last year. “We’re getting a good reaction overall with all our labels,” Facchini said, adding that luxury linens and loungewear label Frette was still very strong in the U.S. “After Sept. 11, people really were drawn to their homes and wanted to create a comfortable environment there. This [tendency] had a positive effect for Frette.”
Mariella Burani Fashion Group: Selective acquisitions, and a streamlined structure to house them, helped net income mushroom 75 percent to $5 million as sales ballooned 41 percent to $193 million in 2001. “We want a vertical structure for our group similar to the big luxury firms so as to have total control,” said Giuseppe Gullo, Burani’s chief financial officer. Burani Group added Revedi and ITM to a constellation of brands that includes its in-house line Mariella Burani, Mila Schon, Sahza and Stephen Fairchild, plus six accessories companies.