Now Stella's on the up

Italian fashion house Gucci today signalled its confidence in star designer Stella McCartney amid increasing evidence of an accelerating recovery in the luxury goods sector.

Gucci's third-quarter numbers pointed to a soaring recovery in the bombed-out luxury sector and showed the first-ever operating profit for its Yves Saint Laurent brand. Group revenues surged 12.8% to e695 million (£487 million) in what executive chairman Domenico de Sole called "a great quarter for the group". Operating profit before goodwill amortisation was up 11.2% to e101 million.

Gucci-brand sales rose 21.6% in the first 14 days of December while YSL ready-towear and Bottega Veneta shoes and handbags jumped 39%. De Sole said there was spectacular sales growth from young British designers Stella McCartney and Alexander McQueen in the quarter to end-October. "Stella McCartney had an outstanding quarter," he said. "Overall sales of McCartney and McQueen were up 65.5% and 20.8% respectively."

McCartney said this month that her business, which had sales of £434,600 in the year to 31 January, lost more than £7 million in its first two years and was being bailed out with £4.5 million a year by Gucci. But de Sole insisted that Gucci retained every confidence in its 31-year-old protègè.

De Sole said nothing about future plans when and chief designer Tom Ford leave the group in April.