Net income for Gucci fell 42%

Gucci Company, Amsterdam, the world’s third-largest luxury goods group said on Wednesday net income fell 42% to $34 million, or 0.35 cents per share, in the quarter ended April 30. Sales fell 1.5% to $576.2 dollars, CNN reported. Gucci, joins its biggest rivals LVMH Moet Hennessy Louis Vuitton and Switzerland’s Richemont, in blaming poor economic conditions in the U.S. and the September 11 attacks for a drop in demand. All three are highly dependent on tourists spending on lavish purchases while on holiday, but air travel has declined following the attacks. “The trading environment in the first quarter was characterised by depressed levels of international travel and tourism, and weak consumer spending in the U.S. and Europe,” Chief Executive Domenico de Sole said in the statement. Gucci, which owns the Yves Saint Laurent, Sergio Rossi, Alexander McQueen, and Stella McCartney brands, changed its outlook for 2002, saying diluted earnings per share would fall to $2.40-$2.8 and sales would rise slightly to $2.38 billion from $2.285 billion in 2002. “These are trying and uncertain times and consequently we have to be cautious about the rest of the year,” De Sole said. The company also said an operating loss before items of $21.6 million at its Yves Saint Laurent fashion unit, which it bought in 1999 for $1 billion, and lower interest on its cash pile, also hurt profits.