Etro goes for growth

Family-owned Italian fashion house is on the brink of a major international expansion and plans to roll out at least 20 stores over the next few years. The house is continuing its diversification into accessories and is entering emerging markets in the Middle East and Russia. The company has just signed a deal with Dubai-based retailer Paris Gallery to open eight more stores in the region between 2007 and 2008. There are even plans to open department store concessions selling accessories and fragrances and featuring a new concept with an in-store architect who will design homes for Etro customers.

“That is a market that in this moment is seeing an incredible boom,” commercial manager Fabio Gnocchi told WWD. “Dubai is a constant construction project.” There is also a retail lifestyle and entertainment center project called Etro Lounge in the works for Kuwait City, which could open next year. The firm is also looking to open an Etro-branded resort in Bali, which will feature the brand’s fabrics and furnishings and a spa.

Etro did not reveal its profit figures, but Gnocchi did say that “sales growth isn’t what stresses us. What we are concerned with is maintaining our profit margin.” He said that the Etro family had considered an initial public offering but had discarded the idea for the company’s sake. “We’ve always taken a step-by-step strategy. Because we don’t have to answer to anyone but ourselves and we don’t have to answer to shareholders…(we can) decide where we want to go, what we want to do and how we do it,” he said.

Etro saw its 2005 revenues rise 24 percent to €230 million, with growth spread evenly over the various geographic regions. US sales were particularly strong, rising 40 percent to €50.6 million or 22 percent of total turnover. Italy accounted for 23 percent, while the rest of Europe accounted for 22 percent. Japan and the rest of Asia represent 20 percent.