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Bulgari Forecasts First-Quarter Loss

Company rules out putting itself up for sale.

Bulgari SpA expects a first-quarter loss, but the Italian jeweler anticipates a gradual improvement later in the year, the company said Thursday.

This story first appeared in the April 17, 2009 issue of WWD.  Subscribe Today.

During a shareholders meeting in Rome, chief executive officer Francesco Trapani and Bulgari’s majority shareholders Paolo and Nicola Bulgari also ruled out putting Bulgari up for sale, a spokesman said.

Trapani attributed the firm’s first quarterly loss since 1999 partly to wholesalers running down their inventories. He said Bulgari could anticipate a contained recovery in the second part of the year after a pickup in third-party demand.

Bulgari is to release its first-quarter results May 12. The company’s share price climbed 5.3 percent to 4.03 euros, or $5.33, at the close of trading Thursday in Milan. Dollar figures were converted at average exchange rates for the periods to which they refer.

Trapani told WWD last month Bulgari would cut jobs, reduce the number of products and close unprofitable stores this year after the company’s earnings fell 45.1 percent to 82.9 million euros, or $122 million, in 2008. Full-year revenues slipped 1.4 percent to 1.08 billion euros, or $1.59 billion.

He reiterated those priorities Thursday and repeated that prices would stay flat except where there have been significant currency fluctuations. Bulgari is negotiating with some of its banks to extend deadlines on as much as 30 million euros, or $39.7 million, of debt, Trapani said. But he underlined there were no significant credit risks. As of Dec. 31, Bulgari’s net indebtedness was 304 million euros, or $385.7 million.

Brothers Paolo and Nicola Bulgari — the grandsons of Bulgari founder Sotirios Voulgaris and chairman and vice chairman, respectively, of the firm — each hold 23.45 percent of Bulgari’s stock, while Trapani, their nephew, owns 4.39 percent.

Shareholders authorized Bulgari to buy back up to 30 million euros, or $39.7 million, of stock to stabilize the share price, which has fallen 43.6 percent in the last 12 months.