Etro’s Revenue Skyrockets
MILAN — Family-owned fashion house Etro is clocking double-digit growth as it embarks on a retail expansion plan to roll out at least 20 stores over the next few years in cities from Manhasset to Mumbai.
Etro’s revenues for the 12 months ended Dec. 31 rose 24 percent, to 230 million euros, or $287.5 million at average exchange rates for the period. Commercial manager Fabio Gnocchi forecasts that 2006 sales are on track to increase another 20 percent as the company continues to diversify into accessories and exploit untapped potential in markets like the Middle East and Russia.
“For us, sales growth isn’t what stresses us. What we are concerned with is maintaining our profit margin,” Gnocchi said. Etro declined to release profit figures.
Gnocchi, who has worked at the company for 23 years, said Etro plans to remain a privately held firm with the flexibility and agility to make important decisions, like closing an underperforming store or taking advantage of a real estate bargain. The Etro family has mulled the idea of an initial public offering in the past, but decided it wasn’t in the best interests of the company, Gnocchi said.
“We’ve always taken a step-by-step strategy. Because we don’t have to answer to anyone but ourselves and we don’t have to answer to shareholders…[we can] decide where we want to go, what we want to do and how we do it,” he said.
Versace Toys With IPO Possibility
MILAN—Gianni Versace SpA is back on the upswing, and so is talk of an initial public offering.
The Italian fashion house on Wednesday issued better-than-expected results for 2005, with a drastic narrowing of operating losses and the elimination of debt setting the company on the right track for a potential stock market listing in a few years, chief executive Giancarlo Di Risio told WWD.
Versace narrowed its 2005 operating losses to 5.5 million euros, or $6.9 million, from 92.4 million euros, or $114.6 million the year before. Last September, when the company released first-half numbers, Versace forecast its full-year loss would be about 15 million euros, or $18.8 million. The company downplayed the fact that asset sales, including that of the Versace family’s Manhattan townhouse, actually allowed Versace to post a pre-tax profit of 37.2 million euros, or $46.5 million. All dollar figures are converted from euros at average exchange rates for the period to which they refer.
“We’re still sticking to our goal to turn a [operating] profit in 2007, but we don’t exclude the possibility that it will happen even earlier in 2006,” Di Risio said. The executive stressed any decision to take the company public rests with its shareholders, the Versace family, but he said the firm will be healthy enough to start pondering the ipo option next year.
Guess Expects Improved Earnings
Guess Inc. said Wednesday that an inquiry from the Securities and Exchange commission has delayed the release of first-quarter earnings.
The Los Angeles-based denim manufacturer had been scheduled to report its financial results for the quarter ended April 1, but is addressing an SEC letter regarding how the company accounted for the acquisition of its European jeanswear licensee on last year’s 10-K filing.
Guess said in a statement that first-quarter results are expected to be filed “on or before its due date of May 11.” Once a date is set, a conference call with analysts and investors will be scheduled.
Despite the delay, the company indicated that it anticipates reporting significantly improved earnings and sales results for the quarter.
For complete coverage, see tomorrow’s WWD.