Italian fashion firm Benetton Group SpA has blamed higher raw material costs and a slowdown in consumer spending in the Mediterranean area for a 28.4% drop in full-year profit.

The result confirms a profit warning issued last month, and sees net income for the year fall to EUR73m (US$95.4m) from EUR102m last time. Revenues fell 1% to EUR2.03bn from EUR2.05bn the year before.

The company said it had taken steps to limit the fall in sales and accelerate growth in nearly all countries outside Europe.

Looking to the year ahead, Benetton said it expects "very limited" growth in its main markets in southern Europe, but forecasts "good sales performance" in emerging and high growth countries.

It also sees a slowdown in raw material price inflation, especially for cotton, "with potential positive effects" from the second half of the year. But overall, net income may fall slightly in 2012, it believes.

Meanwhile, the Benetton family is proceeding with plans to take the Italian clothing company private. Its Edizione Srl investment firm already owns a 67.08% stake in Benetton, and last month said it will offer EUR4.6 (US$6) per share or a total of EUR276.6m, for the remaining shares.