MILAN, Apr 11, 2008 / FW/ — With all the talks about inflation and recession, positive news are always welcome, which Versace and Armani provided Thursday as the two Italian maisons reported significant increases in net income for 2007.
With a turnover of € 310.6 million, amounting to a 7.7% increase on 2006 at current exchange rates, that actually translated to 13.8% when calculated on the basis of constant exchange rate, the Versace Board of Directors reported a strong bill of financial health, particularly considering that during the first half of 2007, 5 boutiques remained closed for refurbishment.
Operating profit in fact rose from € 21.3 million in 2006 to € 25.1 million in 2007, an increase of 18%. Similar positive progress can be seen in the profit before extraordinary items, tax and other costs that amounted to € 23.2 million, an increase of 19.5%.
The consolidated net profit after tax for the financial year 2007 amounts to € 13 million which, setting aside extraordinary costs and the increase of the tax rate, would have been in line with the profit declared for 2006 (€ 19.1 million). Finally, as of December 31, 2007, the Versace Group is showing a positive financial position of 4.4 million Euros
For 2008, the Versace Group plans to continue its expansion in the Asian market with budgeted investment of € 45 million for its development. The company envisions opening 11 boutiques in 2008, the first one, in Kuala Lumpur was inaugurated last March 14.
“The program of openings”, explained Giancarlo Di Risio, “has been financed through dedicated credit lines and has the strategic objective of establishing the Asian market as our second most important trading area by turnover, after Europe itself.”
Specific plans for store openings include two boutiques in Hong Kong, one of which will be the flagship store (on the Canton Road and occupying over 500 square meters spread over two floors), one boutique of 400 square metres in Macao, two boutiques in Taiwan, one in Malaysia, and two additional boutiques in China.
During 2008, the Group will also open two boutiques in Europe, including one dedicated to Versace Home in Milan.
Meanwhile, across town, the Giorgio Armani Group reported an 18% rise in net income for 2007, with an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of 355 million euros.
The hefty gains could be attributed to a more efficient retailing strategy and also the opening of 49 new stores worldwide. For 2008, the Milan-based maison will add another 50 stores.