The Board of Directors of Stefanel S.p.A. has finally approved the group's draft consolidated financial statements for 2008 which indicate that The Nuance Group was again profitable in 2008, although a full breakdown of the

numbers is not yet available.

Although Stefanel's total numbers cover several businesses, the tone of its release was very positive about Nuance in particular: ‘The result from investments, which reflects the performance of the Nuance Group, has turned positive again for E.4.3m ($5.8m), a distinct improvement on the loss of E.0.4m ($0.5m) in 2007. This means that the group's turnaround is practically completed, with a return to net profit.

‘Nuance's expansion policy is also continuing, recently being awarded the concession for the Charles de Gaulle and Orly Airports of Paris [fashion joint venture with ADP-Ed], renewal of the concession for Geneva Airport and a new contract for Toulouse Airport.’

For comparative purposes and according to the contribution shown in Stefanel's accounts, total sales at the Nuance Group were E.1.063.158 ($1.443,347) in the year ending December 31 2007, compared with E.1.025,734 ($1.392,730) in 2006 and in 2007 the company made a gross profit of E.566,976 ($769,833).

It should be noted here that Stefanel – as a 50% shareholder in Nuance – only reports half of the company's sales and profits, so the historic figures above need to be doubled to include the sales and profits also attributed separately to the other 50% shareholder – Gruppo Pam. If these figures are aggregated, then Nuance's sales in 2007 at today's exchange rates (1 USD = 0.736491 EUR) would be doubled to the true total of $2.8bn and its gross profit reflected at just over $1m.

The present positive tone from Stefanel towards its subsidiary company follows the announced fiscal target plan which was announced last year. This set Nuance's target for its fiscal year 2010 compound annual growth rate (CAGR) in sales at around 6% and an EBITDA of around 5%.

Stefanel said then that it envisaged a steady growth in sales and an increase in profit margins for the retailer and Nuance's 2008 results are expected to show good progress in these segments when Stefanel reports the full breakdown of its numbers shortly.

While Nuance has improved its operation with several new points of business over the last two years, its return to profitability in the last two years also reflects a good deal of hard work in a tough period. In particular this includes the shedding of the exceptional costs it was carrying until early 2007 (Copenhagen Airport duty free contract etc) which proved to be a very big drag on its balance sheet.

But while Nuance is back in profit, its 50% owner Stefanel describes the challenge ahead for its fashion retail brand as challenging. It describes this as ‘a difficult market context characterised by declining consumption’, with the Stefanel Group as a whole in 2008 reporting a 13% decline in consolidated revenues of E.275.4m ($373.8m).

The Stefanel Group has also recently been the subject of increased interest from the Spanish investor group Bestinver which – according to the Borsa Italia – has built up a holding of around 15% in the Italian fashion company.