Italian designer Cavalli defies slowdown with new stores
MILAN (Reuters) - Italy's fashion house Roberto Cavalli, known for its animal prints and flowing silk dresses, reported a 4 percent rise in revenues to 185 million euros ($247 million) in 2012, helped by the opening of new stores, including in China.
The Florentine designer, whose leather-fringed jeans have been worn by celebrities like actress Jennifer Lopez and model Cindy Crawford, is among fashion houses reducing their exposure to the crisis-hit Italian market by expanding abroad.
Italian luxury goods makers such as Ferragamo and Prada escaped the worst effects of the economic downturn last year thanks to spending by wealthy tourists from Asia and Russia.
However, sales of Italian fashion in 2012 are estimated to have finished down 4.4 percent against 2011, according to Italy's fashion and textile body Sistema Moda Italia (SMI).
Cavalli said on Monday sales at its directly-owned stores grew 23.4 percent in 2012, outpacing overall sale growth.
This result was achieved thanks to the opening of 38 monobrand stores in 2012, for a total of 168 standalone shops worldwide.
Monobrand stores, which only sell a specific brand, allow fashion houses to attract shoppers with a stronger brand image.
Retail is also a key growth driver for fashion houses, as they can cut distribution layers and boost profitability by directly managing their stores.
Cavalli said retail sales, which represent over 70 percent of the group's revenues, rose 6.8 percent.
Cavalli, owned by the family of the Florentine designer of the same name, is often mentioned in the media as a sale target but the company has said it does not want to sell for now.
In 2012, the group continued to suffer from lower royalties due to the transition of its Just Cavalli licence to a partnership signed with Diesel founder Renzo Rosso.
It said it estimated core earnings (EBITDA) at 11 percent of revenues in 2012.
The group, which also makes perfumes and has expanded into home furniture and cafes, said it is looking to open a new Cavalli Club in Miami this summer. ($1 = 0.7490 euros)
(Reporting by Antonella Ciancio; Editing by David Cowell)