The worst seems to be over for luxury goods companies such as Gucci and Prada, if Domenico De Sole can be believed.

"If nothing catastrophic happens, I believe that the second half of 2003 will be better than the first," the head of Amsterdam-based Gucci said after revealing that sales for August rose 10 per cent in stores in Europe, the US and Japan. In the US, sales of Gucci products at some department stores even doubled during the month, the company said. At its annual meeting in July, Gucci said it was confident that business would rebound after posting an operating loss of $ 24.4m and a sales decline of 6.7 per cent to $ 567.1m for the first quarter ended 30 April 2003.

Prada also sees an upswing in the second half of the year due to an upturn in consumer spending in Asia and North America. According to financial news service Bloomberg, Prada chief Patrizio Bertelli expects profits to increase 30 per cent in 2003. In 2002, Milan-based Prada saw turnover fall 3 per cent to € 1.6bn while net profit rose 12.5 per cent to $ 27m. Italian management consultants Intercorporate predict a growth of 3 per cent for the $ 58bn luxury market in 2003, after having forecast a decline of 10 per cent at the beginning of the year.