Dolce & Gabbana Reports Wider Operating Loss

MILAN (Reuters) – Dolce & Gabbana Holding posted a wider operating loss of 13 million euros ($14.4 million) in the fiscal year through March after increasing investments in its shop network and beauty division, which was brought in-house, as per a filing.

The operating loss was 1 million euros in the previous fiscal year, according to documents filed with the Italian Chamber of Commerce.

While requiring higher investments, the decision to internalize the cosmetics business, which Dolce & Gabbana made in 2022, boosted revenues, the document indicated.

The holding, controlling the Italian fashion house founded by designers Stefano Gabbana and Domenico Dolce, reported a 17% increase in revenues to 1.87 billion euros in the 12 months leading up to March 31.

Sales in Europe, which accounts for 50% of the fashion and home division’s sales, grew 6% year-on-year. However, sales in other major geographic areas declined, notably a 13% drop in the U.S. market.

Demand for luxury goods has been cooling worldwide after an exceptionally strong post-pandemic rebound, presenting a significant challenge for some brands as performance across the sector varies greatly.

Reuters noted in July that Dolce & Gabbana might seek a minority investor soon. Earlier in the month, CEO Alfonso Dolce told an Italian newspaper that the fashion house could explore this option or consider a stock market listing.

($1 = 0.9024 euros)