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Bulgari Posts $13M Net in Q1

Firm was lifted by growth in all markets and product categories at both retail and wholesale.

Bulgari fall 2009

MILAN — Lifted by growth in all markets and product categories at both retail and wholesale, Bulgari SpA returned to the black in the first quarter ended March 31. The Italian jeweler said net profits totaled 9.3 million euros, or $13 million, compared with a loss of 8.3 million euros, or $11.4 million, in the same period last year.

This story first appeared in the May 11, 2011 issue of WWD.  Subscribe Today.


Sales climbed 27.9 percent to 254.7 million euros, or $356.5 million.

Chief executive officer Francesco Trapani told WWD that Bulgari’s positive performance was to be attributed to an improvement of market conditions, but also to the company’s “competitive product development, strong communication, advancement of its shopping experience and cost control.”

All product categories posted a double-digit growth, with sales in Bulgari’s core jewelry division rising 29.3 percent, accounting for 44.8 percent of revenues. Watches gained 21.9 percent; fragrances, 32.9 percent, and accessories, 19 percent.

In particular, Trapani mentioned the new Serpente watch for women as “very strong and successful.” He said timepieces had “a great quarter and an excellent April.”

In the quarter, the company invested 7.6 million euros, or $10.6 million, compared with 9.8 million euros, or $13.4 million, in the same period the previous year. Dollar figures are converted at average exchange rates for the periods to which they refer.

Advertising and promotional costs rose 46.7 percent, although 2011 implied greater concentration at the start of the year, compared with 2010, to support product launches. The executive underscored the power of Bulgari’s “brand campaigns,” fronted by the likes of Julianne Moore and, more recently Kirsten Dunst, the face of the new fragrance Mon Jasmin Noir. “They talk about the brand,” enthused Trapani, letting slip that there will be “another celebrity” in ads going forward.

The company is planning two retrospective exhibitions on the history of Bulgari, “125 years of Italian Magnificence,” in Beijing in September and in Shanghai in December. The shows were previously held in Rome and Paris, but they will be modified for the China leg.

In Japan, despite the closure of stores following the earthquake, tsunami and nuclear tragedy, sales rose 10.7 percent. “Japan held in April, too,” said Trapani. “It’s a very complex situation, with earthquakes still taking place every day, and the nuclear problem, and we are to expect energy issues this summer with the need for air conditioning. It’s also psychological, but the Japanese are tough and they will react, although it’s not over yet.”

Despite the constantly rising price of raw materials and gold in particular, global political tensions, and debt-ridden countries, Trapani said “as an entrepreneur,” he saw “a positive atmosphere,” which he hoped would continue. As of March 31, the company significantly reduced its debt to 132.4 million euros, or $185.3 million, compared with 238.7 million euros, or $327 million, at the end of March last year.

Trapani also said he will take his new post as head of the watch and jewelry division at LVMH Moët Hennessy Louis Vuitton on July 1, leaving his current role. In March, LVMH agreed to acquire 50.4 percent of the jeweler in a cash-and-share swap with the founding Bulgari family. LVMH plans to make a bid for the remainder of the company and is set to pay 4.3 billion euros, or $6.01 billion. The hand over is expected on June 1, and a delisting of Bulgari is to follow by the end of July, following the payment of a dividend of 0.12 euro, or 17 cents at current exchange, at the end of May.

Bulgari shares closed at 12.27 euros, or $17.62, on Tuesday, up 0.1 percent.