Gucci's profits fall 97%

The world's third-largest luxury group Gucci on Wednesday reported a 97 percent slide in first-quarter earnings as a strong euro and the SARS outbreak hit sales of smart bags, fashion goods and perfumes.

The Dutch-listed firm with Italian roots saw net income tumble to 1.2 million euros ($1.39 million) from 35.5 million euros in the first quarter of the previous financial year to end-April. Analysts had expected a drop to 27.6 million.

The company also reported an operating loss of 24.4 million euros versus a profit of 20.4 million the year before, while total revenues fell 6.7 percent to 567.1 million euros.

May and June brought a dramatic turnaround in Gucci's fortunes, however, and there was hope the full year could match or exceed last year's net profit despite the grim first quarter, chief executive Domenico de Sole told Reuters in an interview.

Gucci, which has American designer Tom Ford as creative director and counts Yves Saint Laurent, Stella McCartney and Alexander McQueen among its fashion brands, is majority-owned by French retailer Pinault-Printemps-Redoute (PPR).