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Benetton looks to delist after profits slip

The owners of Italian fashion group Benetton will today decide whether the company should delist after the group issued a profit warning for 2011 forecasting that profit would slip 30%.

The clothing group, which includes the Benetton, Sisley and Playlife brands and has 6,400 stores worldwide, said 2011 net profit was expected to be slightly more than 70m euros (£58m), compared with 102m euros (£85m) the year before. The company also warned that the year ahead would be difficult.

Benetton is 67% owned by Edizione Holding, which represents the interests of the family founders. It has been reported that the family may plan to buy out the minority investors in the clothing group and delist the company from the Milan stock exchange.

In a statement Benetton said preliminary revenues in 2011 reached €2.bn (£1.7bn), down 0.4% compared with €2.bn (£1.7bn) in 2010.

The company said: “In the early months of the year, in particular, there is still a negative impact on margins caused by raw material price inflation. The group will continue to act with determination to achieve maximum process efficiency and cost optimisation…Generally, income from operations will not see an improvement and, due to the increased debt costs, net income will also be under pressure.”

It added that orders for spring 12 were expected to be weaker than last year and said: “Given the high volatility of medium-term prospects, it is difficult, at present, to make a precise forecast for the subsequent fall/winter collection.”

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