WWD.com/business-news/designer-luxury/bulgari-trims-losses-in-first-half-3198996/
government-trade
government-trade

Bulgari Trims Losses in First Half

Bulgari SpA's first-half results helped by growth in product categories.

Bulgari

MILAN — Growth in all product categories, except watches, as well as booming sales in the U.S. and China helped Bulgari SpA trim losses in the first half to 7.7 million euros, or $10.2 million.

This story first appeared in the July 30, 2010 issue of WWD.  Subscribe Today.

This compares with a net loss of 40.5 million euros, or $53.8 million, in the same period last year. The Rome-based company said its performance in the period ended June 30 was “negatively affected” by costs derived from exchange-rate hedging and, in particular, “from the unexpected strong rise” of the Swiss franc against the euro. Bulgari underscored that net profit in the second quarter totaled 600,000 euros, or $762,000.

In the first half, sales rose 11.8 percent to 443.3 million euros, or $589.6 million. Dollar figures are converted at average exchange rates for the periods to which they refer.

Chief executive officer Francesco Trapani said he was pleased with the period’s results, “as they are in line with our forecasts and they confirm the validity of the strategies adopted and focused, on one hand, on cost containment and, on the other, on investment in our creativity and in the growth opportunities offered by the market.”

Sales of jewelry, the group’s core business, rose 14.8 percent, accounting for 45.7 percent of revenues. Perfumes advanced 16.1 percent, although deliveries of Bulgari’s new men’s fragrance, Man, will take place in the second half of the year. The scent was unveiled during men’s fashion week here in June, with the help of Golden Globe winner Clive Owen, who is the face of the advertising campaign. Perfumes are the second largest category for the company, accounting for 23 percent of sales. Sales of accessories rose 25.4 percent and accounted for 8.2 percent of total revenues. The company noted “excellent sale performance of handbags” in Bulgari’s directly owned stores — a 42 percent gain, which benefited from the visibility provided by the advertising campaign featuring actress Julianne Moore.

On Sept. 26, Bulgari will hold a cocktail party to present a capsule collection of accessories by Matthew Williamson at the Bulgari Hotel, during Milan Fashion Week. During Paris couture week in July, the company presented a handbag designed by Isabella Rossellini.

Trapani was especially pleased with the performance of accessories, which, he said, was “rewarding our project for diversification and verticalization in this product category, which we carried out years ago, and our strong commitment for its subsequent development in terms of distribution and image.” Sales of watches decreased 1.2 percent, however, accounting for almost 20 percent of total revenues. The company noted that, stripped of sales generated by the Roth and Genta brand watches, which are no longer in stock, and a different timing of deliveries, this category grew 14 percent. Last year, watches exhibited at Basel were delivered in the second quarter, while this year they are to be delivered in the third quarter.

Sales grew 1 percent in Europe, accounting for 34 percent of total revenues, and 2.7 percent in Italy. Sales in the U.S. jumped 53.4 percent, accounting for 14 percent of revenues. Japan continued to show signs of weakness, inching up 1.2 percent. The rest of Asia, however, rose 26.2 percent, boosted in particular by Greater China, where sales advanced 29.7 percent. Asia accounted for 44.8 percent of sales. The Middle East-other area showed a 5.1 percent decline.