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Ferragamo Profit Soars

Salvatore Ferragamo Italia SpA, which is preparing for an initial public offering this year, reported strong results for 2007, with record net profits that rose 34.2 percent to 47.1 million euros, or $64.5 million at average exchange.

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MILAN — Salvatore Ferragamo Italia SpA, which is preparing for an initial public offering this year, reported strong results for 2007, with record net profits that rose 34.2 percent to 47.1 million euros, or $64.5 million at average exchange.

Sales rose 6.5 percent to 687.4 million euros, or $941.1 million, compared with 645.7 million euros in 2006, or $807.1 million. At constant exchange, sales would have increased 11.3 percent.

Earnings before interest and taxes, or EBIT, rose 54.4 percent to 77.4 million euros, or $106 million, compared with 50.1 million euros, or $62.6 million, in 2006. EBIT margins went from 7.8 percent to 11.3 percent.

Michele Norsa, chief executive officer at Ferragamo, told WWD that he "attributed the growth to the expansion of direct retail, the development of sales and profitability in the Asia Pacific region and Europe."

The company opened 20 directly operated stores and 25 franchised boutiques in 2007.

Geographically, sales were balanced between North America, the company's main market, which accounted for 26.4 percent of revenues; the Asia-Pacific region, which represented 25.6 percent, and Europe, 25.5 percent. Japan accounted for 19.3 percent of sales and Central and South America made up the rest with a 3.2 percent share.

Although any decision will likely depend on market conditions, the Florence-based company is going ahead with preparations for a listing this year. Last month, Ferragamo named the banks for the IPO: J.P. Morgan Chase & Co. and Italy's Mediobanca SpA will act as global coordinators and UBS as joint book-runner on the deal. Up to 30 percent of the group is expected to be sold. The drive toward an IPO is being overseen by Norsa, who joined the company in October 2006. A year later, Ferragamo tapped Ernesto Greco as chief financial officer.

This is a big year for Ferragamo, which has a new creative director, Cristina Ortiz, who unveiled her first collection last month. Also, the company will mark its 80th anniversary with celebrations in Shanghai at the end of March.