Worldwide sales of Lotto products in the first six months of 2004 totalled 135.1 million ($166.0 mm), versus the 131.1 million ($144.9 mm)registered in 2003 (+3%).
Consolidated direct sales totalled 95.4 million ($116.1 mm), a 1% rise from 2003, while licensee sales increased 9.6% to 39.7 million ($48.8 mm).
These data account for the increased dynamism of sales outside Europe in particular in the Far East with Japan above all – against essentially stable results in Europe.
However, the figures do differ from country to country. Against essential stability in the sales volume in Italy which climbed 1% to 40.2 million ($49.4 mm); and Spain which climbed +0.5%, there has been a very encouraging result in the two most important European markets for the Companys sales – France and Germany – in the aggregate marking a 10% increase in sales.
France registered a 9% increase, resulting in the sales turnover exceeding 20 million ($24.6 mm), while sales in Germany rose 14%, confirming the growth achieved in recent seasons. Results were also excellent in Greece, Belgium and Holland, following the change in distribution. Now managed directly from the Montebelluna headquarters through a network of agencies, these countries have practically doubled their sales turnover in the six months under consideration.
Sales in the Italian market were in line with last years figures, confirming the brands staying power in a period marked by a downturn in consumption, while suffering excessively from the bad weather conditions which delayed and therefore reduced sales of summer products.
In terms of products, footwear accounted for 50%, followed by clothing (46%) and accessories (4%). Considering the separate sports, the performance of football and five-a-side football products excelled, overall generating 42% of goods sold and marking a 9% increase on the previous year. This result was certainly influenced by the European Football Championship, which was held in Portugal in June. For that occasion, Lotto organized the launch of two new products (Optika and Vento Evolution), supported by the on-pitch presence of 20% of all the players taking part in the event and by advertising and promotion campaigns in stores.
The tennis contribution was stable at 17% of the total, whereas sales of running footwear have increased significantly to stand at 10% of total sales turnover, thanks in part to the success of AZ Prima shoes which were launched with the Spring/Summer 2004 collection and supported by a television advertising campaign starring Andriy Shevchenko and Clarence Seedorf. Leisure products accounted for a stable 29% share, essentially unchanged from 2003.
2004 plans and closing forecast
A strong focus continues on the Far East countries, with new licensing contacts initiated in Vietnam, Taiwan and India in 2004. The sales turnover of these three countries is estimated to be in excess of 10 million ($12.3 mm) in three years time, while the objective is to double that figure in five years.
During the year, the Company has assigned increasing resources to new product research, targeting a definite increase in innovation with the development of new patents, and also with greater attention focused on product design and appearance. A new line of footwear (Stylesteps) will be presented at the next Micam fair.
As regards the second half-year, forecasts are, however, prudent, with an estimated closing figure of 260 million ($319.5 mm) for total sales with a 2% increase on 2003.
