MARZOTTO NET PROFITS INCREASE 14% IN 1999
Byline: Luisa Zargani
MILAN — Marzotto Group this week reported results for 1999 in line with the previous year, registering net profits of $39 million after taxes and minority interest.
Including profit attributable to minority shareholders, the group’s net profits rose 14 percent, to $74 million, from those of 1998. Dollar figures are translated from the Italian lira at current exchange.
Consolidated net sales rose 3.3 percent to $1.35 billion. The group’s operating income rose 12 percent to $151 million.
A statement issued by the company said the improvements came despite difficulties in the textile and clothing markets. The sales and earnings increases were mainly achieved by the subsidiary Hugo Boss AG, the German men’s clothing manufacturer in which Marzotto is majority shareholder, and Linificio and Canapificio Nazionale, which makes linen yarns. Results at Boss consistently exceeded forecasts, especially in the fourth quarter, the company said.
Marzotto chairman Jean de Jaegher said that in 2001, the company expected to see benefits from its strategy that focuses on increasing production outside Italy, where production costs are notably high. In addition to plants in Italy, Marzotto currently has production facilities in Germany, Switzerland, Tunisia, Turkey, the U.S. and the Czech Republic. Industry sources say Marzotto plans to open a plant in Lithuania in the near future.
In the first months of 2000, Marzotto opened a series of showroom and commercial offices in Rome, Palermo, Tokyo, London, Madrid and Dusseldorf. “This is part of a strategy to create an efficient and streamlined distribution network in all our markets,” said a Marzotto spokesman, pointing out that the company is focused on its apparel divisions. In addition to its own lines, Borgofiori, Lebole and Marlboro Classics, Marzotto produces licensed collections for Gianfranco Ferre and Missoni.
The strengthening of its commercial structure abroad is a priority for the company. Exports accounted for 77 percent of the company’s 1999 sales, up two percentage points from the prior year, Marzotto said.
During the annual meeting of the apparel and textile company last year, de Jaegher said the textile division was hurt by the general crisis that hit the wool market in the last three months of 1998, the Asian economic crisis and the devaluation of currencies. De Jaegher, however, was optimistic about the future. “I think a recovery will be noticeable in the second half of 2000,” said de Jaegher.