By  on January 30, 2009

MILAN — Bulgari SpA registered a 9.8 percent drop in fourth-quarter revenues, after demand for jewelry and watches softened in the run-up to Christmas — and so far, sales have not improved this year.

For the three months through Dec. 31, sales fell to 312.6 million euros, or $412.3 million, from 346.5 million euros, or $501.9 million, the Italian jeweler reported Thursday. Full-year revenues dipped 1.5 percent to 1.08 billion euros, or $1.42 billion.

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

In a conference call, Bulgari chief financial officer Alberto Nathansohn added that sales so far this month were lower than the same period last year.

In a statement, chief executive officer Francesco Trapani said, “Our 2008 sales results show that the international financial and economic crisis is having a strong negative impact on our business.”

He added that he now expected the company’s full-year earnings to decrease by more than 22 percent (the drop in the first nine months of 2008). Bulgari is slated to report full 2008 results, including profits, on March 11.

Looking to the current year, Trapani said he anticipated business would remain “very difficult” for most of 2009, but ruled out cutting prices.

“When the market is so bad, these activities have very little effect, and they can damage the prestige of the brand,” he said.

Instead, Trapani said the focus was on efficiency, “and this is why we are currently reviewing very carefully all the elements of the cost and investment structure, as well as of our supply chain, with a precise objective of protecting as much as possible our profitability and our cash flow.”

As of Dec. 31, Bulgari’s net financial position was 306.2 million euros, or $405.3 million at current exchange.

All product categories registered sales decreases in the quarter except perfumes and accessories, which gained around 5 percent. Sales of jewelry, Bulgari’s core business, fell 12.8 percent, while watches fell 21.2 percent.

Geographically speaking, it was a similar picture across the board, with revenues down in all regions except the Middle East, where sales increased 11.1 percent. Europe was hit hardest, falling 16.8 percent, while Japan, which represents around a fifth of revenues, slipped 6.9 percent, despite the opening of two flagships in Tokyo in the fourth quarter of 2007.

Bulgari released the sales figures after the end of trading on the Milan Bourse. The company’s share price closed down 6.5 percent to 3.29 euros, or $4.35.

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