MILAN — Bulgari chief executive Francesco Trapani thinks that June might have been the start of something big, or at least something better.
This story first appeared in the July 31, 2003 issue of WWD. Subscribe Today.
Struggling with the combined effects of the Iraqi war, SARS and a tough global economy, Bulgari posted a smaller than expected dip in second-quarter sales as business conditions improved noticeably in June and July. Still, sales for the second quarter ended June 30 slid 6.9 percent to $193.9 million as first-half revenues were down a less severe 2.4 percent to $377.7 million from $386.8 million.
“June was the first month showing improvement,” Trapani said in a phone interview. “That helped us in the second quarter.”
Trapani said preliminary sales data from July were even more encouraging but he warned that he still hasn’t seen a rebound in tourism to Europe: “We didn’t yet see improved tourist flows in June. We sold primarily to locals.”
Bulgari didn’t break out second-quarter numbers, which were obtained by subtracting first-quarter sales from those of the first half. Dollar figures are converted from the euro at current exchange. In local currency, first-half sales came in at 330 million euros compared with 338 million euros in the first six months of last year.
Top-line numbers were hit hard by currency fluctuation. The company said second-quarter revenue would have risen 1 percent at constant currency rates while turnover for the first half would have risen 4 percent.
Bulgari will release profits for the first half on Sept. 11. Trapani said in a statement that he is “confident that an increase in sales volume and profits for 2003 is still achievable” if the economic environment improves.
Jewelry and accessories saw sales growth in the second quarter. Jewelry turnover rose 8.5 percent while sales from accessories expanded 48.3 percent. Trapani said poor tourist traffic especially penalized sales of watches and fragrances, as those categories lost 19.2 percent and 27.8 percent of revenues, respectively.
Specifically, Trapani said watch sales should pick up in the second half of the year as Bulgari rolls out products launched at the Basel Watch Fair earlier this year.
Trapani also said perfume sales should improve later this year. Bulgari said perfume stores slowed down orders in the first part of the year as they anticipated the new Omnia fragrance to hit shelves in September.
Italy was the quarter’s only geographic bright spot. A “very good sales trend within the domestic market” boosted second-quarter revenue by 2.3 percent, although it did slow from the 15.4 percent jump registered in the first quarter.
Second-quarter sales in the rest of Europe fell 10.6 percent. Currency impact weighed in heavily on sales figures from Japan and the Americas, where revenues dropped 8 percent and 15.6 percent, respectively.
The drop in Japan contrasts sharply with the 17.1 percent growth spurt registered in the first quarter of the year. Trapani said weaker perfume sales impacted top-line numbers from the country but he’s not worried about the future.
“Numbers from July confirm that Japan will be an excellent market for us,” he said.
Sales in the Far East excluding Japan dropped 0.4 percent while those in the Middle East and Bulgari’s other markets fell 7.5 percent.
GRUPPO TOD’S SPA
MILAN — Swift sales in its home market of Italy and double-digit growth for emerging apparel brand Fay boosted Tod’s top line in the first half of the year.
Gruppo Tod’s SpA saw its sales for the six months ended June 30 rise 3.8 percent to $198.4 million (173.4 million euros) from $191.2 million in the first half of 2002. Excluding currency fluctuation, sales would have risen a more robust 8.6 percent, the firm said.
Dollar figures are converted from the euro at current exchange. Tod’s reported sales of 173.4 million euros compared with year-ago sales of 167.1 million euros.
Tod’s does not break down second-quarter figures but the subtraction of results from the first three months of the year revealed a 12.4 percent jump in second-quarter revenue to $79.7 million.
“Positive figures on quarterly sales show that our strategy to stay strongly focused on medium/long-term development is right,” chairman and chief executive Diego Della Valle said in a press release. “The appeal of our new products, plus new store openings, makes me certain that the group will be stronger and more competitive once markets return to normal.”
Tod’s said revenue at its namesake brand, its biggest sales generator by far, rose 0.4 percent to $118 million, or 103.1 million euros, during the half.
Hogan’s sales dropped 9.1 percent to $50.2 million, or 43.9 million euros. Tod’s said Hogan’s numbers were hurt as it sped up deliveries to take place in the latter part of 2002 rather than early 2003. Tod’s said second-quarter Hogan sales were up 18.5 percent.
The Fay brand saw a 51.3 percent jump in first-half revenue to $27.5 million, or 24 million euros.
Leather goods and apparel both showed growth in the half, jumping 16.1 percent and 44.9 percent, respectively. Shoes did not fare as well with sales falling 4.2 percent.
North America was the only market seeing a drop in first-half revenue, falling 13.5 percent to $29.2 million, or 25.5 million euros. Sales in Italy rose 7.2 percent to $94.3 million, or 82.4 million euros, while revenue in the rest of Europe grew by 1.2 percent to $58.8 million, or 51.4 million euros.
Sales in Asia and the rest of the world rose 41.6 percent to $16.1 million, or 14.1 million euros.
HUGO BOSS GROUP
BERLIN — The Hugo Boss Group saw profits go up as sales declined in the first half.
The firm, based in Metzingen, Germany, said Wednesday that net income firmed up 6 percent to $41.2 million during the six months ended June 30 as sales fell 5 percent to $566.2 million.
Dollar figures are converted from the euro at current exchange, as Boss reported net income of 37 million euros on sales of 508 million euros.
Excluding the harsh effects of currency fluctuation, sales would have risen 0.5 percent. Boss Woman’s sales were up 35 percent to $24.5 million, or 22 million euros.
Income before taxes rose a more dramatic 32 percent to $55.7 million, or 50 million euros.
The company’s board confirmed its forecast for the full year, which calls for sales to match last year’s levels, excluding currency translation. Net income is projected to rise about 10 percent, and Boss Woman is expected to break even during the second half of the year.