Benetton plans float

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BENETTON Sportsystem, the sportswear arm of Italy's Benetton family, is considering a multi-million pound flotation on the London Stock Exchange within the next two to three years.

Formally established only in 1993, the group is now one of the world's biggest sports equipment concerns, owning a clutch of household names including Nordica ski boots, Kastle skis, Prince tennis rackets and Rollerblade skates.

Sales are expected to hit $1bn (pounds 660m) in 1996. Last week Benetton Sportsystem filed plans to float up to a third of Rollerblade in New York in the summer. "We would like to go public with Benetton Sportsystem too," said managing director Silvano Storer. "If you are in Europe, first of all that means London."

The firm is 100 per cent owned by Edizione, the Benetton family's Italian holding company, which owns the eponymous retail chain plus a host of restaurants, supermarkets and agricultural interests in Italy, as well as rugby, basketball, volleyball and Formula One motor racing teams.

It operates separately from the clothing chain, but uses Benetton factories to produce knitwear for its growing Sportsystem Active arm, set up in 1994 to exploit its brands on leisure wear.

Profits after tax reached L62bn (pounds 26m) in 1995 on sales of L1,354bn (pounds 568m), rises of 83 per cent and 18 per cent respectively, fuelled by dramatic growth at Rollerblade, in sportswear and its Asolo mountain and hiking boots range.

That compared with sales of L2.9bn (pounds 1.2bn) for the Benetton chain. While margins there are higher at the moment, Mr Storer stressed that was because Sportsystem was still investing heavily in growth.

The move into sports equipment dates back to Edizione's 1989 purchase of Nordica. Kastle in Austria and Italy's Asolo followed in 1991, along with Prince and Rollerblade in the US as the family balanced winter sports with tennis and new sports for younger people, including items such as Killer Loop snowboards and sunglasses.

Each is a leader in its market and the firm, chaired by Gilberto Benetton, now has 2,000 employees and sells into 100 countries worldwide. Mr Storer estimates Benetton Sportsystem is now seventh among the world's top sportswear firms, behind the likes of Nike, Reebok and Adidas.

Most of its sales are in so-called "soft products" such as clothing and shoes - skis, boots and rackets count as "hard". Benetton aims to have around a quarter of its turnover in this area in the next stage of its expansion.

Rollerblade has been the star performer, however, with sales of $400m last year. The group recently lifted its stake to 90 per cent in a leveraged deal - US investment bank Goldman Sachs owns the balance - and intends the flotation to recoup some of its investment.