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The results, less than a week after LVMH Moët Hennessy Louis Vuitton posted a 49 percent jump in net income, underscore how one of Bernard Arnault’s most treasured fashion properties is fast becoming another cash cow among his vast constellation of luxury holdings.
Indeed, Dior president Sidney Toledano confirmed the fashion house is on track to reach 1 billion euros, or $1.22 billion at current exchange, in volume by 2007 — and with profitability in excess of 20 percent. (Dior’s beauty business has already surpassed the 1 billion euro threshold.)
“This is exactly in line with the plan. The momentum of the brand is really strong worldwide,” Toledano said in an interview Monday at Dior’s gray and white headquarters here. “For the full year, we confirm a significant improvement in the profitability.”
Christian Dior S.A., the holding company that includes LVMH and Christian Dior Couture, did not quantify the Dior profits; it provides that figure only annually. In 2003, operating profits zoomed 21 percent to 40.1 million euros, or $48.9 million, as reported. Dollar figures for the first-half results are at average exchange.
Still, Monday’s results demonstrate accelerating profitability, which Toledano attributed variously to rising sales per square foot, improved deliveries and logistics, high creativity and tight cost controls in administration and production.
Sales in the six months ended June 30 increased 16 percent to 274 million euros, or $334.3 million, a 20 percent rise at constant exchange rates, as reported.
“In July and August, the trend was also very good, in Asia and the U.S., and Japan was very good as well,” Toledano said, noting that sales in the U.S. are up 43 percent year-to-date in dollars.
On the women’s side, Toledano cited “excellent” performance of designs by John Galliano, in particular his Rasta line of bags and shoes, edged in red, gold and green.
A bowling-shaped bag with dice hardware called the Gambler has also been taking off since deliveries began last month. “On Saturday, we were out of stock on the best styles,” Toledano said. “We have a waiting list.”