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Italy's Zegna sees lower profits in 2009
MILAN, June 3 |
MILAN, June 3 (Reuters) - Italian luxury men's suits maker Gruppo Ermenegildo Zegna forecast lower profits this year after a 20 percent drop in net profit excluding an extraordinary item for 2008.
The company said it was going ahead with plans to open stores in emerging markets like China where sales have been more robust than in mature markets like Japan and the United States.
"The economy's ... prolonged (and) difficult situation will be reflected in a drop in our results for 2009, especially in profitability," Chief Executive Ermenegildo Zegna said in a statement. "But personally I remain convinced that it is the right time to go on the attack."
The crisis has been so severe that it has hurt luxury goods sales in a sector that is usually protected from economic downturns.
Last month, Salvatore Ferragamo, another luxury brand from Italy, reported a 17 percent drop in net profit for 2008 on stable revenues.
In order to prepare for a possible economic recovery in 2010, Zegna said it was opening stores in more than 20 countries this year such as China, Taiwan and Singapore.
It was also re-styling some stores in Europe, it said. In 2008, Zegna's 547 stores made net profit of 62.3 million euros, including an unspecified extraordinary item. Excluding the item, the figure was down 20 percent from the prior year. No 2007 figure was given.
Revenues reached 870.6 million euros, up 3.2 percent at current exchange rates.
Zegna described its results as lower than expected even though it said the performance was in line with other companies in the luxury sector. It said its net financial position remained "significantly" positive but did not give any details.
Zegna is privately held. (Reporting by Gilles Castonguay; editing by Elaine Hardcastle)
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