YSL to Make Small Operating Profit in Fiscal 2005

Luxury goods maker Gucci Group NV said it expects its Yves Saint Laurent brand to reach profitability in its fiscal year from Feb. 2005 to Jan. 2006, a year later than it had originally targeted, according to a Dow Jones report.

Citing “current economic conditions,” a spokesman said Gucci expects YSL to make “a small operating profit” in fiscal 2005. Management at the world’s third biggest luxury goods company has been focusing considerable energy on turning around YSL as it seeks to build on its namesake division’s success and create a multi-brand empire.

Chief executive Domenico de Sole told analysts at a meeting in London on Tuesday that the company expects YSL to report a fiscal 2002 operating loss of less than the $81.5 million it made for the year ended Jan. 31, 2001.

Gucci is expected to report earnings for the year ended Jan. 31, 2003, in the second half of March. A Gucci spokesman said later that the company, 58.2%-owned by French retailer Pinault-Printemps-Redoute SA, believed it could still reach profitability at YSL in the 12-month period from Feb. 2004 to Jan. 31 2005, but that the following year was “more realistic” as a target in view of current economic uncertainties. He added that those economic conditions would have a bearing on the exact size of the operating profit YSL achieves in 2005.