GUCCI GROUP didn’t hold onto the services of chief executive Domenico De Sole and creative director Tom Ford, but the luxury house, majority-owned by Pinault-Printemps-Redoute, painted a bright picture of second-half prospects just before the upcoming departures of the duo became official. Gucci’s net profit for the second quarter ended July 31 plunged 47 percent to $26.6 million from $50.2 million in the year-ago period, as both costs and markdown expenses increased. Sales, in line with analyst expectations, were relatively stable, rising 1.1 percent to $684.5 million from $676.8 million. Sales for the quarter were up 2.2 percent on a constant currency basis, De Sole said, noting that retail sales for the group have “surged” since Aug. 1. “There was an improvement in the month of July as the collection hit the store,” De Sole said, noting strong demand for fall merchandise. “The problems that were here have disappeared, meaning the war and SARS.”… Sales at LVMH MOËT HENNESSY LOUIS VUITTON fell 3.3 percent in the third quarter ended Sept. 30 to $3.43 billion, versus $3.55 billion a year ago, but the French luxury goods giant said it maintains a bullish outlook for the balance of the year. The quarterly figures compare favorably to those for the nine months, when group sales fell 8 percent to $9.56 billion. Stripping out the impact of currency fluctuation, organic growth was 3 percent in the nine months. “Tourism levels have continued to improve in October and there appear to be signs of a sustained economic recovery in the U.S. and Japan,” LVMH said in a statement. “The group expects this momentum to continue in the fourth quarter.”… Profits at COMPAGNIE FINANCIERE RICHEMONT SA dropped by nearly half in the first six months of the fiscal year, declining 49.2 percent to $78.4 million from $154.4 million as revenues fell faster than costs. Sales dipped 14.5 percent to $1.79 billion from $2.1 billion in the period, which executive chairman Johann Rupert attributed to the strengthening of the euro against the dollar and the yen, and the impact on consumer confidence of the SARS crisis and the Iraqi war. At constant exchange rates, sales would have dropped 6 percent during the six-month period. “All other things being equal, it appears that the worst problems that the luxury goods world has faced in recent months and years may be behind us,” Rupert said. Separately, the company named Richard Lepeu, currently chief operating officer of Richemont, and formerly chief executive of Cartier, to the post of chief financial officer. He succeeds Jan du Plessis, who as reported, has been named non-executive chairman of British American Tobacco…. BURBERRY GROUP PLC’s revenues rose 17 percent to $531.6 million during the first half ended Sept. 30. The company’s revenue growth was powered by a 25 percent rise in retail sales to $177.6 million and a 14 percent climb in wholesale sales to $304.4 million. Wholesale results benefited from a pickup in sales in Spain, where a repositioning of the brand began to pay dividends. Licensing revenue grew 15 percent to $51.9 million. Burberry’s retail sales accounted for approximately 33 percent of total revenue in the first half, and were driven mostly by new store openings, with “a marginal contribution” from existing stores…. HERMES INTERNATIONAL’s sales inched up in the third quarter ended Sept. 30 to $347.8 million, a 0.5 percent increase that translated to 9 percent in organic terms. Analysts described it as a “strong” performance, but cautioned that Hermès had an easy basis for comparison last year, when third-quarter sales were down 2.6 percent, as reported. Leather goods provided the greatest amount of horsepower, with third-quarter sales of bags and travel items jumping 19.3 percent at constant exchange. Sales of perfumes advanced 6.4 percent, ready-to-wear 5.4 percent and silks 2.3 percent. Watches remained a tough category, with sales dropping 12.7 percent at constant exchange…. BULGARI’s sales grew a scant 0.9 percent, to $211.7 million, in the third quarter ended Sept. 30, but ongoing cost-cutting helped boost its profits 35.7 percent to $22.1 million. At constant exchange, sales would have risen 8 percent, the company said. Bulgari chief executive Francesco Trapani commented, “For 2004, we think it’s realistic to expect that we’ll be operating in a better environment than that of 2003 which was characterized by events such as the war and SARS.” However, he cautioned that the fourth quarter will present tough comparisons against a strong prior-year period…. At TOD’S, net income for the nine months ended Sept. 30 dropped 23.9 percent to $22.7 million as costs, investments and currency fluctuation pressured the bottom line. Sales for the period were practically flat, rising 0.4 percent to $333.4 million, or 286.4 million euro, from $332.1 million, or 285.3 million euros. Tod’s said that sales would have grown by 4.4 percent at constant currency rates… IT HOLDING said that strong advertising investments caused its nine-month earnings before interest, taxes and goodwill and trademark amortization to fall 2.3 percent to $49.8 million. Sales for the period rose 2.8 percent to $610.1 million. Gianfranco Ferré revenues grew 7.7 percent to $104.2 million… PRADA has renegotiated its bank financing, and its chief executive, Patrizio Bertelli, expects a 45 percent increase in net income to about $57.2 million as sales come in at roughly last year’s level of $1.79 billion.

This story first appeared in the November 17, 2003 issue of WWD. Subscribe Today.

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