FOCUS-Gucci<GUC.N> profits soar as growth continues
By David Jones
MILAN, March 27 (Reuter) - Italian luxury goods company
Gucci Group NV <GCCI.AS> continued its financial renaissance
when it reported on Thursday that annual net profits more than
doubled and looked forward to further growth.
Gucci's net profits for the twelve months to end-January
1997 rose to $168.4 million from $82.9 million on net sales up
76.1 percent to $880.7 million after $500.1 million.
The company, who's shares are listed in Amsterdam and New
York, said its results were driven by record performances across
the board -- in its distribution channels and product categories
and also across all its geographic areas.
Gucci has been one of the most remarkable corporate recovery
stories in Italy. Founded by Guccio Gucci in Florence in 1923,
it underwent serious problems in the late 1970s and the 1980s as
a third generation of Gucci cousins quarrelled among themselves.
Bahrain-based Investcorp bought up Gucci in two steps in
1989 and 1993 and turned the company rapidly around by gaining
more control of its distribution and refocusing the group under
a new U.S. designer Tom Ford. Investcorp completed the full
flotation of the group in early 1996.
"We continue to be confident of growth in Italy and the rest
of the world for 1997," said Gucci chairman and chief executive
Domenico De Sole in a video news conference from Toyko with
journalists in Milan.
De Sole emphasised the rapid recovery of the leather goods,
shoes, watches, jewellery and design house by pointed out that
its 1996 operating profits topped its total net revenue in 1993.
Operating profits almost doubled to $239.1 million from
$121.1 million in fiscal 1995 and, as a percentage of revenues,
improved to 27.2 percent from 24.2 percent in 1995.
De Sole said he was comfortable with Wall Street analysts'
forecast of net income per share for 1997/98 of over $3 a share
after net income per share rose to $2.76 in 1996/97 from $1.68.
Among Gucci's 152 world-wide stores, sales from Gucci's
directly-operated stores rose by over 60 percent, while
wholesale, including franchise, duty free and department &
speciality stores sales, soared by over 180 percent.
For this current year, Gucci plans to expand and refurbish
its flagship stores in London's Sloane Street and in Beverly
Hills, while paying particular attention to its key regional
markets in Japan and Western Europe.
De Sole said the group's first two stores in China had
opened in February and the outlets in Beijing and Shanghai had
started well in their first few weeks of trading.
"In short, we believe 1997 offers significant potential to
raise the standards we have set in place for Gucci: Leadership
in design, excellence in quality and unmatched value to the
consumer," De Sole said in a results statement.
In Amsterdam stock market trading, Gucci shares were quoted
up 1.70 guilders to stand at 138 guilders at 1445 GMT after
earlier hitting a new high for the shares at 152 guilders.
Rtr 12:09 03-27-97 |
