Versace Forecasts Double-Digit Revenue Growth After 2011 Profit
Gianni Versace SpA (GIAN) forecast revenue growth of at least 10 percent in each of the next three years after “fantastic” U.S. demand helped the Italian fashion house swing to a profit in 2011.
Net income was 8.5 million euros ($11.4 million) last year compared with a loss of 21.7 million euros in 2010, the Milan- based company said today in a statement. Revenue climbed 16 percent to 340.2 million euros.
“Looking ahead we are cautiously optimistic for 2012,” Chief Executive Officer Gian Giacomo Ferraris said in the statement. “The Versace brand has great potential for growth in existing as well as new markets, even if expansion slows in the global market for luxury goods.”
Versace echoes Hermes International SCA (RMS) and other luxury companies in predicting sustained demand for their products amid slowing economic growth in China and Europe’s debt crisis. Sales of high-end goods should rise 10 percent in 2012, half last year’s rate, as European shoppers cut spending by a mid-single- digit percentage, according to HSBC analyst Antoine Belge.
“America is doing fantastic,” Ferraris said this month in an interview at the Baselworld watch fair. Globally, year-to- date sales “confirm the double-digit growth we gave in 2011. We are confident that we can repeat the fantastic 2011.”
Earnings before interest, taxes, depreciation and amortization advanced 73 percent to 38.7 million euros, Versace said today. The fashion house, recognizable by its Medusa-head logo, is aiming for sales of about 500 million euros and an Ebitda margin of 20 percent by 2014.
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