Armani 2007 oper profit surges, shrugs off crisis

EDTMILAN, April 10 (Reuters) - Giorgio Armani's operating profit rose 17 percent last year, pulled by a surging China market, and it expects growth in 2008 despite a credit crunch, the Italian luxury goods and fashion designer said on Thursday.

Armani, known for his classically elegant lines and muted colours in clothes, had earnings before interest and tax (EBIT) of 289 million euros ($457.9 million). Consolidated sales rose 8 percent to 1.6 billion euros, with the rise 12 percent at constant exchange rates.

Investors are closely watching fashion and luxury goods companies for any slowdown in spending on premium items as a credit crisis and falling financial markets rattle consumers.

"Although in 2008 there is a more uncertain economic climate, I anticipate another year of growth supported by the 7 percent increase in our wholesale orders ... for our autumn/winter 2008 season," the 73-year-old designer said in a statement.

Armani said it planned to open 50 more outlets this year to add to its 471 outlets comprising franchises and directly-owned stores.

Chinese sales grew 24 percent last year, leading regions around the world, while European sales outside Italy rose 19 percent. North American sales were up 7 percent, with the rise 17 percent at constant exchange rates.

Known for his softer, flowing version of the business suit, Armani has pushed the marketing power of a famous name to the limit by expanding into hotels and interior design as well as sunglasses, ceramics and perfumes.

Armani rival Versace said last month its high-end position meant it was not feeling the impact of the global economic slowdown.

Gucci Group, which is owned by PPR (PRTP.PA: Quote, Profile, Research), turned in a jump of 29 percent in operating profit in 2007 to 731 million euros and said it expected this year should show further growth.

And Bernard Arnault, chairman of the world's largest luxury goods group LVMH (LVMH.PA: Quote, Profile, Research), said in February he had not yet seen any impact on high-end spending although he acknowledged it should come some time. (Reporting by Ian Simpson; Editing by David Cowell)