Leading Italian textiles and fashion group Marzotto has revealed its profits more than halved in the first half of this year as it was hit by the economic slowdown, Hugo Boss's troubles in the US and costs related to the acquisition of Roman fashion house Valentino.

The company said in a news release its net profit plunged 51.3 per cent to 19 million euros from 39 million euros in 2001 on the back of reduced margins at Hugo Boss AG and lower selling prices at its textile unit.

Total sales for the six month period slipped 3.7 per cent to 832 million euros due to a near 21 per cent slide in textile sales, although apparel sales rose 1.2 per cent.

Marzotto added it invested 152 million euros in the first half of which around a quarter went into Valentino which it acquired in March. As of June 30, its debts stood at 535 million euros compared to 429 million euros last year.

The group also said it expects 2002 sales to be "slightly lower" than in 2001 due to Boss' recent profit warning and anticipates operating profit being equivalent to 7-8 per cent of sales, down from more than 10 per cent in 2001.