( Bloomberg ) - Benetton Group SpA Chairman Luciano Benetton and Managing Director Gerolamo Caccia Dominioni bought a combined 380,000 shares, saying Italy's largest clothes maker is undervalued given earnings prospects.
The stock's price does not ``reflect the current and future value,'' Dominioni, who bought 50,000 shares, said in a statement from the Ponzano Veneto, Italy-based company today. Luciano Benetton bought 330,000 shares. Both purchases took place in the last 24 hours and would be worth about $3.4 million combined, given today's closing price.
The shares have lost more than a quarter of their value this year, following retail stocks lower across Europe amid concern about slowing economic growth and demand. The company today confirmed its forecast that 2007 earnings before interest, taxes, depreciation and amortization would grow over 20 percent and revenue would gain 9 percent.
``Benetton Group has solid fundamentals, and I am convinced that recent market reaction is based purely on considerations determined by factors unrelated to the trend of the company's performance,'' Dominioni said in the statement.
Benetton, which ended a four-month search for a new chief executive officer in March, stopped offering discounts to almost 5,000 franchisees in the first half that had hurt profitability while spurring sales. It's investing 300 million euros this year to speed growth outside Italy.
The stock rose 23 cents, or 2.7 percent, to 8.89 euros in Milan today.
Dominioni started as Benetton's CEO on June 1. The former Warner Music executive replaced Silvano Cassano, who quit in November, 2006, along with Financial Director Pier Francesco Facchini after clashing with the company's founding family over growth plans.