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Friday, July 30, 2010

Bulgari Posts Modest Sales Gain in Second Quarter

Italian luxury jeweler Bulgari Group is slowly climbing out from a disastrous 2009 as it post results Thursday for the first half of 2010.

The Rome-based company said sales for the period increased by 8.2 percent (11.8 percent at current exchange rates) to 443.3 million euro ($578.3 million) for the first half of 2010. It had an operating profit of 12.3 million euro ($16 million) and a net loss of 7.7 million euro ($10 million). However, the company says it was “a great improvement” compared to the 40.5 million euro ($52.8 million) loss of the first half of 2009, and it was negatively affected by exchange rates.

Bulgari also notes that it had a net profit of 600,000 euro ($782,783) for the second quarter.

During the half year, all product categories, with the exception of watches, contributed positively to growth.

Jewelry rose by 10.5 percent at comparable exchange rates (14.8 percent at current exchange rates). Watch sales decreased by 4.6 percent (1.2 percent at current exchange rates). Perfume sales grew 13.6 by percent for the period and accessory sales grew by 20.7 percent led by handbag sales in Bulgari-owned stores.

Sales in Europe grew by 1 percent (led by Italy’s growth at 2.7 percent) with clear signs of improvement in the second quarter in its directly owned stores, benefiting from increased tourism.

Business in the Americas grew by 52.7 percent, while sales in Japan, fell by 4 percent. Sales in the rest of Asia are still growing briskly at 21.4 percent led by China (29.7 percent). Sales in the Middle East were up 6.1 percent for the period, but couldn’t offset sales in other parts of the world, which was down 6.1 percent.

“I am pleased with the results achieved by the Group in the first half of the year, 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,” said Francesco Trapani, Bulgari Group CEO. “In particular, the excellent performance of accessories is rewarding our project for diversification and verticalisation in this product category, which we carried out years ago, and our strong commitment for its subsequent development in terms of distribution and image. In light of July sales trends, I think it is reasonable at this time to confirm the validity of the ‘mid single digit’ growth guidance at comparable exchange rates for the yearly turnover, which we had already provided to the market, though I do hope that all the initiatives already in place and set to continue for the rest of the year will allow us to beat the guidance."

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