MILAN — Bulgari SpA returned to profit in the third quarter and said the gradual improvement in sales in the period, particularly at directly owned stores, was continuing through November.
“We hope [it] will continue in the months to come,” Bulgari chief executive officer Francesco Trapani stated Thursday.
After losses in two straight quarters, the Italian jeweler reported net profits of 7 million euros, or $10 million, for the three months through Sept. 30, from 23 million euros, or $34.7 million, in the same period last year. Revenues declined 9 percent to 233.2 million euros, or $333.3 million, from 256.2 million euros, or $366.2 million, hurt significantly by de-stocking in the wholesale channel.
In the first nine months of the year, Bulgari reported net losses of 33.5 million euros, or $45.8 million, from net profits of 77.2 million euros, or $117.5 million, on revenues that declined to 629.5 million euros, or $860.4 million, from 762.5 million euros, or $1.16 billion.
Dollar figures were converted at average exchange rates for the periods to which they refer.
Trapani told WWD in March that Bulgari would cut jobs, reduce the number of products and close unprofitable stores, such as in Palm Beach, Aspen and New York’s Madison Avenue. He said Thursday he was “very satisfied” with the initial results of these restructuring efforts, “which exceeded expectations.”
“The group will continue to focus strongly on efficiency,” Trapani stated. “At the same time, management is working hard to provide an even more competitive offer and stimulate further demand. To this end, I am pleased to announce that a series of important and particularly innovative projects in terms of strategic approach, product, communication and customer service will start from the first months of 2010.”
He gave no further details.
Third-quarter earnings before interest, taxes, depreciation and amortization fell to 35.9 million euros, or $51.3 million, from 42.6 million euros, or $64.2 million. At Sept. 30, net debts amounted to 328.4 million euros, or $489.3 million, roughly in line with the same date last year.
By product, accessories were the only category to record sales growth, increasing 2.9 percent to 16.6 million euros, or $23.7 million. Sales of jewelry fell 9.7 percent to 96 million euros, or $137.2 million; watch sales dropped 17.7 percent to 54.3 million euros, or $77.6 million, and sales of perfumes and cosmetics slipped 0.8 percent to 60 million euros, or $85.8 million. The company added that based on orders and turnover, it was reasonable to assume the destocking of perfumes was “reaching its end.”
Bulgari also noted its products performed better worldwide in its directly owned stores. Sales of jewelry fell 4 percent, and watch sales slipped 6 percent, while sales of accessories in Bulgari stores dedicated to the category grew 11 percent.
By region, overall sales were down 30 percent in Japan, 23 percent in Europe and 20 percent in the U.S. Sales grew 16 percent in the rest of Asia and 53 percent in the Middle East and other countries.