Italy's Zegna says Q1 retail sales up 20 pct

Wed Apr 28, 2010 9:21am EDT

Related Topics

* Q1 sales boosted by China, largest market from 2009

* 2009 net profit down 73 pct on restructuring, weak margins

* Sees expansion in the U.S., Europe

By Antonella Ciancio

MILAN, Apr 28 (Reuters) - Leading global menswear brand Gruppo Ermenegildo Zegna store sales rose more than 20 percent in the first three months of 2010, driven by growth in China and a recovery in the luxury market, it said on Wednesday.

Italian brand Zegna, best known for its tailored suits, also gave details on 2009 including a net profit fall of 73 percent to 17.3 million euros ($23.04 million) on restructuring costs and weak margins. It confirmed sales at 797 million euros, down 8.4 percent.

"The results achieved in a dramatic economic period ... give us more strength amid the recovery, of which we start to see positive signs, first from the American market," Chief Executive Ermenegildo Zegna said in a statement.

Zegna gave no further details on first-quarter sales.

Worldwide luxury goods sales should rise more than 4 percent this year as the industry recovers from the worst economic crisis in decades, which has sapped demand for designer clothes and accessories. [ID:nLDE63E2EA]

Zegna, which has 550 stores worldwide, reiterated it would open 20 shops this year in China, which became its biggest market in 2009, as well as in Europe, the United States and Brazil. Emerging markets represent about 40 percent of sales.

Zegna, which celebrates its 100th birthday this year, said it would return to investing in Europe, with store openings in Monaco, Vienna, Amsterdam and Athens.

In 2009 earnings before interest, tax, amortisation and depreciation (EBITDA) was 85.4 million euros. The company did not provide EBITDA for 2008.

Net positive financial position doubled to 93 million euros, despite the downturn, it said. ($1=.7508 Euro) (Writing by Antonella Ciancio; Editing by Jon Loades-Carter)

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