MILAN — Bulgari SpA registered a 5.1 percent drop in fourth-quarter revenues to 297 million euros, or $436.5 million, hurt by heavy destocking in the wholesale channel and ongoing slow sales in Japan and the U.S. At comparable exchange rates, sales would have declined 2.7 percent.

This story first appeared in the January 29, 2010 issue of WWD. Subscribe Today.

Chief executive officer Francesco Trapani said he was “particularly satisfied” with sales in directly owned stores, which grew 12 percent at comparable exchange rates in the last three months of the year.

The ceo expects the destocking in the wholesale channel, which he described as “massive,” to continue throughout the current year, “although to a lesser degree in the jewelry and watch segments, while de-stocking in the perfume and accessories segments should be complete.”

All product categories registered sales decreases in the quarter except the core jewelry business, where sales inched up 0.3 percent to 129.9 million euros, or $190.9 million, accounting for 43.8 percent of revenues. Sales of watches declined 4.5 percent, while accessories fell 19.2 percent. However, the company said watch sales in directly operated stores grew 20.2 percent at comparable exchange rates. Perfumes and cosmetics dropped 11.1 percent to 71 million euros, or $104.3 million, the second largest category for the brand, accounting for 23.9 percent of sales. Sales from Bulgari’s hotel venture fell 6 percent.

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

Geographically in the fourth quarter, Japan posted a 27.3 percent drop in sales. While admitting Japan “really suffered,” Trapani said in a conference call with analysts he does not anticipate any changes in the retail network in that region, but that the company is taking appropriate steps, working more on “product assortment, closer to local need” and focusing on being “more dynamic in the entry price lines.”

Revenues in the U.S. also suffered, registering a 17.3 percent decline, while sales grew 0.7 percent in Europe. “The U.S. was very weak for most of the year, but we saw business pick up in the last quarter and especially in November and December — a very good sign,” said Trapani. The rest of Asia showed a positive performance, with sales rising 18.6 percent, as did the Middle East and other areas, growing 2.5 percent. In the full year 2009, the rest of Asia accounted for 23 percent of sales, followed by Japan, accounting for 19 percent. Trapani said Greater China has grown to account for 15 percent of sales, and is larger than the U.S., which accounted for 12 percent of revenues.

Trapani said “also in light of the 12 percent sales increase at comparable exchange rates posted by directly owned stores in the first three weeks of the year,” it was “reasonable to expect that 2010 will be better than the prior year.”

The company is slated to release full 2009 results, including profits, on March 15.

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