MILAN — Marzotto is not expecting profit and revenue growth this year, but the company’s executives told analysts Thursday that 2004 should be brighter, citing a double-digit jump in Valentino’s spring orders and the successful restructuring of the textile division, which has been losing money over the last few years.
Marzotto said its consolidated 2003 earnings before interest and taxes and sales should come in line with those figures for full-year 2002. In 2002, EBIT was $148.94 million (converted from 125.3 million euros at current exchange), while sales were $2.13 billion (1.79 billion euros).
Chief executive and vice chairman Antonio Favrin said reduced losses at the textile division and Marzotto’s strategic decision to focus more on the group’s three strong brands — Hugo Boss, Valentino and rugged sportswear line Marlboro Classics — is starting to pay off.
“We’ve reached the objectives we set forth,” he said at an analyst meeting here.
Marzotto executives said they are pleased with the turnaround of Valentino, which the company bought in 2002. The company has been working to increase sales through measures like launching the diffusion line R.E.D., diversifying into new product categories like watches through licensing pacts and bolstering its wholesale presence in U.S. stores.
Valentino narrowed its net loss for the nine months ended Sept. 30 to $14.15 million (converted from 11.9 million euros at current exchange) from $38.63 million (32.5 million euros) the year before. Sales rose 7.6 percent to $137.77 million (115.9 million euros) from $128.02 million (107.7 million euros). On an operating level, Valentino swung into the black with a profit of $5.59 million (4.7 million euros) from a loss of $13.91 million (11.7 million euros) the year earlier. Marzotto said Valentino’s full-year revenue growth should be in line with that of the nine-month period while net losses should decrease.
Marzotto said spring wholesale orders at Valentino were up 20 percent. The company also said that retail sales at directly owned stores had reversed their negative trend in the first part of the year. Sales fell 2 percent in the first half, were flat in July and dropped 11.1 percent in August. Things picked up in the latter part of the year. Sales were up 13.7 percent in September, 31.8 percent in October and 15 percent in the first half of November. Michele Norsa, Valentino’s ceo and Marzotto’s general manager for apparel, downplayed the importance of the Christmas season for Valentino as brand’s sales are not gift-driven.
In other Marzotto news, Hugo Boss ceo Bruno Sälzer said Boss Woman is overcoming its botched start in 2001 and should post sales of about $59.44 million (50 million euros) in 2003 and more than $71.32 million (60 million euros) in 2004. Net losses at the division should be $3.57 million (3 million euros) this year, and the unit should break even in 2004.