MILAN — Strong performances in the U.S. and Japan and growth in its core jewelry business helped Bulgari’s first-half profits soar 35 percent to 33.7 million euros, or $41.4 million, from 25 million euros, or $27.6 million, last year. (Figures have been converted to dollars at average exchange rates for the corresponding periods.)
Sales gained 7 percent to 352.8 million euros, or $432.9 million, from 330.1 million euros, or $364.6 million, a year ago. At comparable exchange rates, sales grew 11 percent, the company said.
Net profits were also boosted by lower interest payments, currency variations and lower operating costs, Bulgari said. As a result of the lower costs, Bulgari increased its operating profits by 21 percent to 42.3 million euros, or $51.9 million, from 35.1 million euros, or $38.8 million, last year.
Francesco Trapani, chief executive officer of the Bulgari Group, said in a phone interview Monday he was “truly satisfied” with the results, which came despite an “unfavorable outside situation.” He said the growth of the American and Japanese markets, where sales rose 27.3 percent and 22.5 percent, respectively, are signs of “hope for a recovery of the European market,” where sales dropped 3 percent in the period.
“We have benefited from the change of attitude in the U.S., and an improved mood there.
“Local business fared well, but we paid a price with tourists — the traffic over the past six months has been hit by the strong euro, the war in Iraq and terrorism,” said Trapani, noting that sales in the Japanese market have grown 65 percent at comparable exchange rates since the first half of the year 2000.
The jewelry division, which accounts for the bulk of revenues with sales of 152.9 million euros, or $187.6 million, grew 15.2 percent at comparable exchange rates. The growth, said Trapani, was backed by a 77 percent increase in the division’s sales since the first half of 2000 at comparable exchange rates. Last year the division had sales of 136.6 million euros, or $150.9 million.
Bulgari’s perfumes grew 16.9 percent, with sales of 57.8 million euros, or $70.9 million, versus 51.5 million euros, or $56.9 million, last year. Confirming a recent pickup in demand, the watch division grew 7 percent in the period, with sales of 109.5 million euros, or $134.3 million, against 106.8 million euros, or $118 million a year ago.
This story first appeared in the September 14, 2004 issue of WWD. Subscribe Today.
Bulgari supported the launch of products such as the Astrale jewelry line and the Ergon watch with advertising and promotion spending of 43 million euros, or $52.8 million, up 26 percent from 34.1 million euros, or $37.7 million, in the same period last year.
“There is a strong interest in new quality, prestigious products,” said Trapani. “If you have a strong, real brand with a global awareness and you work on the product, there is room for growth.”
Trapani projected 10 to 11 percent growth in net profits for the year and an 8 to 9 percent increase in sales.