MILAN — Despite higher investments and promotional expenses, Bulgari SpA posted double-digit profit growth in the first half and forecast continued sales momentum for the rest of the year.
Net profits for the first six months ended June 30 rose 32 percent to 58.4 million euros, or $71.8 million at average exchange rates for the period. Sales, as reported in July, advanced 8.9 percent to 487.8 million euros, or $600 million. The company said revenues would have grown 15 percent at comparable exchange rates.
"The first half was a period in which Japan continued to suffer, which is a bad thing since it is such an important market for us, but we performed extremely well in the rest of the world and managed to compensate," Bulgari chief executive Francesco Trapani said in an interview.
Trapani expressed some concerns about the continued weakness of the yen, but remained optimistic about the appetite for timepieces, jewelry and other luxury items in the second half. He said a strong Christmas season will allow Bulgari to post full-year net profit and sales growth (at constant currency rates) of between 10 and 12 percent.
First-half earnings before interest and taxes gained 17 percent to 61.7 million euros, or $75.9 million. Profit margins increased despite the fact that the jeweler made larger investments in retail and other operations. Bulgari's profits also grew as the company lifted its retail prices, a measure that was intended to partially compensate for the strength of the euro against the dollar and yen. Bulgari's prices have grown by an average of four percent over the last year, Trapani said.
"A good businessman always wants to sell his goods at the highest price," he said.
First-half operating costs rose 7.7 percent to 194.4 million euros, or $239.1 million, as Bulgari built and renovated its store network. As of June 30, Bulgari had 232 stores, 136 of which it owns. Later this year, it will fete a new towering flagship in Ginza in a bid to jump-start business in the lackluster Japanese market.
Advertising and promotional expenses grew 3.9 percent to 55.3 million euros, or $68 million.
Bulgari specified that second-quarter net profits grew 31.5 percent to 34.4 million euros, or $46.4 million, while revenues increased 7.7 percent to 262.6 million euros, or $354.5 million.The company's net debt rose to 154.8 million euros, or $190.4 million, from 115.5 million euros, or $142.1 million, a year earlier. Bulgari said the increase stemmed from a variety of factors, including the payment of an 86.9 million euro, or $107 million, dividend in May and a strategy to exploit a weak dollar and stock up on precious stones and other raw materials.
"We decided to take advantage of the current prices and stock up now," Trapani said.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews