By  on July 28, 2005

MILAN — Bulgari Group's sales jumped 8.7 percent in the second quarter, boosted by double-digit increases for accessories and fragrances.

Sales for the three months ended June 30 rose to 209.8 million euros, or $268.5 million. This reflects a slowdown from first-quarter sales growth of 11.9 percent, but the company noted a more difficult comparison base from the second quarter of last year.

Dollar figures are at the average exchange rate. Bulgari said second-quarter sales would have increased 10.3 percent at constant exchange.

Francesco Trapani, chief executive officer of the group, said he's confident about the second half of the year. Trapani said he is concerned by the recent terrorist acts in London and the Egyptian resort town Sharm El-Sheikh, and the fear they have generated, but said he's not adjusting full-year targets just yet.

"Terrorism isn't helping us at all," Trapani said. "We are in a world that is very volatile. The atmosphere is what it is."

Bulgari releases second-quarter profits on Sept. 26.

On a geographic basis, second-quarter sales grew in nearly every market. Revenue in Italy rose 10.1 percent to 30 million euros, or $38.3 million, despite what Bulgari termed "the persistent uncertainty of macroeconomic conditions." Sales in the rest of Europe advanced 11.8 percent to 51.6 million euros, or $66.1 million.

A stronger dollar-to-euro exchange rate helped boost revenue from the Americas by 19.8 percent to 30.9 million euros, or $39.6 million.

Revenue from Japan increased 13.5 percent to 50.5 million euros, or $64.6 million, while revenue from the rest of Asia advanced 2.4 percent to 34.4 million euros, or $44 million.

Regarding product categories, Trapani said second-quarter sales of jewelry were "in line with what they should be." The segment grew 5.2 percent to 91.3 million euros, or $116.8 million.

Watch sales suffered in the quarter, losing 3.7 percent to 57.9 million euros, or $74.1 million. Trapani attributed the drop to the timing of product launches. Bulgari won't start selling its new Assioma watch, featuring a brown alligator strap, until October. Last year's big watch launch was for Ergon. It hit stores in May, thus boosting second-quarter sales in 2004.A Bulgari spokesman said the company wanted to avoid in-house competition between Ergon and Assioma.

Bulgari said the new men's fragrance Aqua boosted second-quarter fragrance sales 23.6 percent to 36.3 million euros, or $46.5 million. Revenue from accessories, including handbags and scarves, increased 40 percent to 18.7 million euros, or $23.9 million.

Trapani said accessories are doing so well that the company has plans to develop a new retail concept carrying just those items. The first pilot stores are slated to open early next year in Europe and Asia.

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