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Striking a Balance in Milan

Executives at fashion houses hope the spring 2004 season finally brings light to what has been three dark, gloomy years.

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MILAN — Italian fashion designers and luxury goods executives are crossing their fingers.

Many hope that the spring 2004 season will finally reveal some light at the end of the tunnel, after three years of darkness and a trilogy of disaster — terrorist attacks, war in Iraq and SARS.

As Milan gets rolling with shows and events — the big players take center stage starting Tuesday — most fashion executives here have started to think somewhat optimistically, based on a surge of sales in July and August, followed by a rosier-than-expected September.

“If nothing major happens, then expectations are good,” said Giancarlo Di Risio, chief executive at Fendi. “One can only hope that the upswing in consumer spending, which started late this summer, will spill into the coming season.”

Domenico De Sole, Gucci Group’s chief, concurred that sales have heated up, saying the Gucci brand has registered a double-digit growth in the U.S., Asia and Europe, since August. “We expect a similar growth rate until the end of the year,” said De Sole.

Pre-spring orders, which started rolling into designer showrooms in July, confirm the upbeat forecasts, be it single-digit growth or peaks of up to 20 percent.

“With a single-digit growth, our pre-spring already shows a general optimism and that business is coming back, especially in the U.S.,” said Robert Triefus, corporate vice president of worldwide communications at Giorgio Armani.

Most executives interviewed said pre-spring collections are steadily gaining momentum as a tool to guarantee fresh stock and to monitor the latest market trends.

Keeping a lid on prices, a stronger-than-ever priority this season, should also help rekindle consumers’ desire to shop, lately severed by excessive price increases on branded products.

“It’s not really price resistance, but certainly price sensitivity,” said Jason Weisenfeld, worldwide communications and advertising director at Versace, adding that for the first time, the company is widening its price range. On average, this season Versace lowered its prices by 25 percent. For example, the opening price for eveningwear is $1,600, down from $2,067.

Many have whittled company costs across the board and have built spring collections with simpler construction, more basic fabrics and less labor-intensive craftsmanship. “It’s important to define the entry price for each item beforehand,” said Marco Gobbetti, ceo at Moschino.
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