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Fashion’s Big Question: De Sole Hopes Contract Will Be Settled by Nov. 1

Gucci contract news could come in a few weeks, as the firm posted a 47 percent drop in 2nd-quarter profits along with a 1.1 percent uptick in sales.

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Gucci provided less detail regarding its “other operations” category of emerging brands, including McQueen, McCartney, Boucheron, Balenciaga, Sergio Rossi and Bottega Veneta.

Collectively, these brands saw second-quarter sales rise 16.1 percent to $97.9 million. The loss before goodwill and trademark amortization and restructuring costs narrowed slightly to $16.65 million from $16.77 million.

Gucci specified that Bottega Veneta saw 33.7 percent revenue growth in the quarter, accelerating to a 42 percent jump since the beginning of August. The company also noted Alexander McQueen and Stella McCartney revenues rose by more than 100 percent for the period.

The sales base for each of these brands, however, has changed rapidly as Gucci proceeds with store openings. Just so far this year, McQueen opened stores in London and Milan, while McCartney opened a retail location in London and Los Angeles. Over the last year or so, Bottega Veneta has opened five major stores in London, Tokyo, Milan, Paris and Honolulu.

On the call, De Sole noted both Boucheron and Sergio Rossi are adjusting their product offerings to be more commercially viable. In addition to slowing the retail rollout at Boucheron, Gucci aims to introduce more affordable items at the jeweler to boost volume.

De Sole said sales at Sergio Rossi are improving after “product issues” were addressed. Last month, Gucci tapped a new ceo at the division, Prada alumnus Claudio Paulich.
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