By  on March 14, 2011

MILAN — Bulgari is showing LVMH Moët Hennessy Louis Vuitton that it is worth $6 billion.

The Rome-based fine jeweler said gains in all product categories and a recovery across all geographical areas, together with cost-cutting strategies, helped it close 2010 with a net profit of 38 million euros, or $50.1 million, compared with a loss of 47.1 million euros, or $65.4 million, in 2009.

A strong rebound in the watch category and continuous growth of the firm’s jewelry and accessories divisions boosted Bulgari’s revenues in the fiscal year ended Dec. 31, which grew 15.4 percent to 1.07 billion euros, or $1.41 billion, compared with 926.6 million euros, or $1.28 billion, in 2009.

Dollar figures were converted from the euro at average exchange for the periods to which they refer.

Chief executive officer Francesco Trapani said the results show how Bulgari “was able to brilliantly overcome the economic slump, reaping the benefits of the efficiency and cost-containment strategy and therefore becoming more solid. At the same time, the intense creative and product development activity generated an even more competitive product offer, which enjoyed great success in all product categories.”

Bulgari’s financial results were released on the heels of LVMH agreeing 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 deal will double the size of LVMH’s watch and jewelry division, make the Bulgari family the second-largest family shareholders in LVMH, with a 3.3 percent stake, and give Bulgari the financial muscle to further expand its product categories and retail network around the world.

Trapani, who is to join the executive committee of LVMH and take the management helm of the French group’s watch and jewelry division in the second half of the year and eventually leave his post as ceo of Bulgari, said “the general market recovery and excellent sales trend in the months of January and February, which posted 25 percent growth at comparable exchange rates over the same period of last year, lead me to be cautiously optimistic and also constitute a positive starting point for the months to come.”

In 2010, jewelry, the group’s core business, rose 21.4 percent to 488.4 million euros, or $644.7 million. Watches gained 1.3 percent, reaching sales of 214.9 million euros, or $283.6 million, but the category showed 7 percent growth in the fourth quarter after three weak periods. Accessories grew 34.7 percent during the year, while perfumes, Bulgari’s second-largest category, rose 12 percent.

Sales in Europe rose 5.9 percent, accounting for 34.8 percent of revenues. Asia saw a 24.1 percent increase, accounting for 45.5 percent of total sales — the biggest market for Bulgari. In particular, sales in Greater China surged 48 percent. The U.S. grew 23.5 percent, making up 13 percent of total revenues.The performance in the Middle East-other was mixed in 2010, but, with a recovery in the last quarter, the area recorded an overall increase of 1 percent. As of Dec. 31, Bulgari counted 293 stores, of which 173 are directly owned, an increase of seven compared with the previous year.

As of Dec. 31, net debt stood at 135.3 million euros, or $178.6 million, compared with 216.8 million euros, or $301.3 million, at the end of the previous year.

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