Wholesale suffers in 2009 from destocking but own stores fare better.
Jewellery sales at Bulgari fell 14.4 percent and watch sales fell 24.5 percent in 2009 as the luxury group continued to battle against the downturn.
Despite the overall decline in the company’s full-year results, watch sales at Bulgari’s own stores improved in the final quarter of the year showing an increase of 20.2 percent. The group said that in general own-store sales – particularly in China, South Korea and Australia – performed better than its wholesale channels which continued to fall victim to general destocking.
Total sales at Bulgari fell 13.8 percent at current exchange rates to €926.6 million (£841.9 million) in 2009 and gross margin dropped €565.7 million (£513.9 million). EBITDA before costs related to the group’s restructuring was €82.4 million (£74.9 million), down 50 percent at current exchange rates.
Geographically, Europe was down by 16.7 percent and the US market fell 31.6 percent, while Asia fell 18.8 percent. Apart from the 33.9 percent drop in Japan, the rest of Asia was stable. The Middle East was up 12.2 percent at current exchange rates.
Bulgari chief executive Francesco Trapani said: “The 2009 financial results were heavily influenced by the global crisis in financial markets and its effects on the demand for goods and services: in this highly negative macro-economic context, having started the year with two extremely difficult quarters, Bulgari began to show progressive improvement from the third quarter, continuing to year-end."
Trapani said that the first two months of 2010 showed a high single-digit increase in turnover with all channels and product categories performing well. He added: “In light of these initial market indicators, and of the highly innovative projects in terms of brand image and product launches already in place and set to continue for the rest of the year, I believe we can reasonably expect a mid single-digit increase in turnover in 2010 at comparable exchange rates, and a contribution margin increasing to about 63 percent on sales.”