BasicNet, parent company of Kappa, Robe di Kappa and Jesus Jeans, already had a license for Superga, the venerable Italian brand known for its early vulcanized tennis shoes, but the licensor, Formula Sport Group, had gone bankrupt and is in liquidation. Last July, exercising an option ahead of time, BasicNet acquired the ownership of theSuperga trade name for €23 million, while settling a number of outstanding issues. The two parties agreed to drop certain claims against each other. BasicNet decided not to demand damages related to Formula Sport Group’s bankruptcy, in exchange for the cancellation of royalties. The settlement involved the elimination of a provision of €3.7 million that boosted BasicNet’s financial results for the 3rd quarter ended Sept. 30. BasicNet will amortize the cost of the acquisition over a 20-year period at a rate of €1.2 million per year. BasicNet has already invested resources for the re-launch of Superga, but the investments are expected to increase now that the company owns the brand and that it has become more profitable generally. With sales of €23.5 million during the first nine months of this year, up from €16.4 million in the same period of one year ago, Superga represented only 11.36 percent of the aggregated revenues of BasicNet, comprising its direct sales, mostly in Italy, and those of the licensees of Kappa represented 71.5 percent of sales and Robe di Kappa 13.9 percent. BasicNet saw its operating profit before amortization and depreciation (EBITDA) dramatically soar to €17.38 million in the 9-month period ended last Sept. 30, compared with €4.01 million a year earlier. Cost efficiencies and higher revenues, especially from its Kappa and Superga brands, were the main factors of this performance. For the first nine months of the financial year, BasicNet’s aggregate sales went up by 15.46 percent to €207.21 million, while its consolidated revenues rose by 3.12 percent to €63.45 million. The group’s direct sales in Italy account for 89 percent of this turnover. Operating profits benefited from a drastic reorganization of the group’s sourcing contracts in 2006 and the consequent decline in purchase prices. The gross margin increased to 43.04 percent from 34.77 percent of sales, thanks to a 9.96 percent drop in the cost of goods to €36.14 million. Royalties and commissions received from sourcing deals rose by 28.87 percent to €17.86 million. The aggregate sales of the Kappa brand rose by 16.42 percent in the 9-month period to €148.17 million, Robe di Kappa increased by 2.49 percent to €28.77 million, and Superga jumped by 44.08 percent to €23.54 million. Instead K-Way dropped by 16.69 percent to €6.49 million and Lanzera’s sales reached only €0.25 million. Higher European sales outside Italy underpinned the growth in the Kappa and Superga businesses. Superga also scored better in South Africa. Net debt soared to €62.87 million at the end of June from €44.45 million on Dec 31, due to the acquisition of the Superga brand, which was concluded in July.