Basicnet has won a bid to take over the leases of 22 outlets and discount stores, mostly located in Italian factory outlet centers, that the bankrupt Mariella Burani Fashion Group had taken over from the former Gruppo Finanziario Tessile. They will be rebranded in the next ten months to sell some of the group's brands such as Superga, Robe di Kappa and K-Way.
The Italian group already owns or franchises about 270 stores trading under these brand names, mostly in Italy. Basicnet will retain only about 60 of the 130 employees of the 22 new locations. It has agreed to pay about €2.5 million including the inventories in the transaction, a little more than previously anticipated. It will have a right of first refusal when the stores will be auctioned off.
In the first three months of this year, Basicnet opened nine Superga stores and seven Robe di Kappa stores - 13 stores in Italy and three in Greece. Besides these brands, Basicnet also owns Kappa, which it only distributes at wholesale. It also has a 50 percent stake in Sabelt, an Italian brand of footwear and apparel.
Basicnet reported a 9.02 percent increase in its direct sales and those of its licensees for the first quarter of this year to €114.24 million, driven by particularly strong growth in the Asia-Pacific, the Middle East and Africa.
The turnover was up in all regions, with sales in Europe up by 5.56 percent to €84.50 million, by 0.30 percent in the Americas to €3.43 million, by 14.77 percent in Asia-Pacific to €17.96 million and by 47.42 percent in the Middle East and Africa to €8.35 million.
However, Basicnet's consolidated sales dropped by 7.92 percent to €33.43 million due to weak demand in Italy and the financial woes of some retailers due to the economic crisis and difficulties in obtaining financing from the banking system. Consolidated sales comprise the company's direct wholesale and retail sales, mostly in Italy, and the royalties and commissions that it gets from its licensees in the rest of the world.
The gross margin dropped to 34.35 percent from 36.31 percent because it decided to support sales volumes by not raising prices. The operating profit fell by 15.81 percent to €3.19 million and the net profit slipped by 10.46 percent to €1.76 million.
Royalties and sourcing fees were up by 19.92 percent to €10.45 million, lifted by a 49 percent surge in sourcing commissions thanks to increased purchases by its licensees. In the quarter, Basicnet reached new license agreements for the Superga brand in Central and South America and struck a deal with the Russian group Bosco di Ciliegi, owner of the GUM shopping center in Moscow, for the K-Way brand of apparel.