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Bulgari posts stable revenues in 2008, but drop in Q4 jewellery sales

ROME, January 30, 2009 – Italian luxury group Bulgari reported stable revenues in 2008 compared with a year earlier, but noted a sharp drop in jewellery sales in the fourth quarter due to the impact of the global economic downturn.

Francesco Trapani, CEO of the Bulgari Group, said: “For our company, the nasty economic environment had a strong negative effect on the holiday season’s sales. It is therefore evident that this situation will be inevitably reflected in a decrease of the 2008 profits higher than the one showed at the end of the first nine months of the year.”

He added in a trading statement, “I would like to underline that, differently from what some important competitors have done, Bulgari has not reduced its selling prices and has not changed its discount policy with the final client and trade in order to protect the integrity of the brand in the long term.”

Trapani said, “Considering the results of the last months and expecting a very difficult 2009, the company is further committed to be as efficient as possible by reassessing the costs and investments structure in order to defend its profitability and cash flow as much as possible.”

In the full year 2008 the Bulgari Group registered a turnover of 1,075.1 million euros, compared to 1,091.0 million euros in 2007, a decrease of 1.5 percent at current exchange rates or 0.9 percent at comparable exchange rates.

Revenues in the jewellery segment, core business of the Group, fell by 1.5 percent, although this should be considered in the light of a particularly high comparison base in the previous year (+20.0 percent in 2007.)

However, looking at the fourth quarter of 2008, when the global economic slowdown accelerated, jewellery sales fell year-on-year by 17.3 percent, although this should be compared with a particularly high base of +20.3 percent in the same quarter of 2007.

REVENUES BY GEOGRAPHICAL AREA

In the full year 2008 revenues in Europe fell by 1.4 percent, with an especially negative performance in Italy (-11.1 percent), a result which was already in evidence during the first part of the year. The other European countries grew overall by 3.5 percent.

The United States showed a contraction of 6.7 percent, although this should be considered in the light of a particularly high comparison base of +21 percent in 2007. Asia limited its fall to 1.2 percent. A growth of 9.1 percent at current exchange rates was recorded in the Middle East/Other area.

Looking at the fourth quarter of 2008, only the Middle East/Other area achieved a good growth (+11.1 percent at current exchange rates), while the other regions fell.

Europe by 16.8 percent (-17.7 percent in Italy); the United States by 9.3 percent; and Asia by 20.0 percent.