BULGARI BOOSTS STAKE IN ASIAN FRANCHISES

Byline: Samantha Conti

MILAN — Like other European luxury brands, Bulgari is spending cash to gain control.
The Italian luxury jeweler said Monday it had acquired majority stakes in or exclusive ownership of its Asian franchises and planned to pay for the operations — plus previous acquisitions and some corporate restructuring — through a three-year Eurobond worth some $84 million.
Francesco Trapani, chief executive of the Bulgari Group, said in a statement that the buyback plan was aimed at tightening control over Asian markets. He said the action “allows us to better exploit the interesting opportunities and potential that these markets offer…and guarantee immediate and effective control of the operations in these areas.” Bulgari acquired a 51 percent share of the company that manages the three Bulgari stores in Hong Kong, and a 51 percent stake in the company that distributes watches to retailers in the area.
Additionally, Buglari bought 51 percent of the operation that manages Bulgari stores in Taiwan, and also purchased the remaining 49 percent of Bulgari Asian Operations Ltd., which runs the stores in Singapore. Bulgari already owned a 51 percent stake in Singapore company.
In Japan, Bulgari raised its stake in Bulgari Japan Ltd., a joint venture, to 80 percent from 51 percent. That company manages 19 stores in Japan, which generate almost 23 percent of the group’s revenues. There are currently 100 Bulgari stores in the world.
While Bulgari declined to provide further information regarding the Eurobond, the company did say it would also help finance the acquisitions earlier this year of Gerald Genta SA, Daniel Roth SA and Manufacture de Haute Horlogerie. As reported, Bulgari purchased those three companies for $22.5 million from The Hour Glass, a Singapore-listed group.
The money will also be put toward restructuring Bulgari’s debt.
In the first half ending June 30, Bulgari’s net profit rose 101 percent to $29.4 million while sales rose 44 percent to $226.7 million. Forty-five percent of Bulgari is quoted on the Italian bourse, while the remaining 55 percent is held by the Bulgari family.

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