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Bulgari Hiking Prices, Buying Back Shares

Bulgari SpA said it will raise prices across all product categories "by some percentage points" to protect margins because of soaring material costs...

Bulgari SpA said it will raise prices across all product categories “by some percentage points” to protect margins because of soaring material costs — notably gold — and unfavorable exchange rates.

In addition, a spokesman for the Italian jeweler said Friday that shareholders authorized Bulgari to buy back 15.4 million shares over the next 18 months to prop up the share price, which has lost almost one-third of its value in the last six months.

The spokesman said sales had suffered in March after a strong January and February, but performed better than expected at the Basel watch and jewelry fair this month, confirming comments chief executive officer Francesco Trapani made at the company’s annual meeting in Rome.

He also confirmed sales, operating profit and net profit forecasts for the year of between 8 and 12 percent on a comparable exchange rate basis.

Bulgari shares closed up 6.7 percent to 7.47 euros, or $11.90 at current exchange, in trading on the Milan Stock Exchange on Friday.

Trapani said in March he was “very cautious” about the current year in light of the economic climate and that a price increase was expected, with gold prices up more than 32 percent in the last 12 months. He also said U.S. business “suffered in the first three months of the year” and was soft in the U.K. “and partially, Spain and Italy.”

Bulgari has diversified into new segments such as high-end cosmetics and accessories to drive growth and better cushion it against a slowdown in any single product category. Watches, for example, which accounted for 27 percent of Bulgari’s turnover last year, tend to be more susceptible to economic downturns as they attract more aspirational consumers.

In 2007, Bulgari posted a 12.4 percent increase in earnings to 150.9 million euros, or $206.8 million at average exchange, on sales of 1.09 billion euros, or $1.5 billion.