Luxury jeweler Bulgari reported
a net loss of $53.8 million for the first half of the year. Sales in the U.S. are dismal, with demand for luxury jewelry and watches reaching new lows.
During the same period last year, Bulgari reported a $82.9 million net profit.
Revenues are down by 21.7% to $526.6 million.
Chief executive officer Francesco Trapani said second-quarter results were an improvement over the first three months of the year and "particularly encouraging in terms of growing performance of the directly owned stores."
But penalized by extensive destocking in the wholesale channel, Bulgari showed a net loss of 11.2 million euros, or $15.2 million, in the second quarter compared with a net profit of 31.4 million euros, or $48.9 million, in the second quarter of 2008. Sales in the second quarter dropped 20.5 percent to 218.3 million euros, or $296.8 million, or 27.7 percent at comparable exchange rates. Sales in directly owned stores recorded a "definitely stronger performance" than the wholesale channel, seeing a 3.3 percent increase.
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The ceo also pointed to the revamping of the firm's worldwide organization, which will be completed by the end of the year in order to "make the company more effective, streamlined, efficient and thus less costly." Corporate costs are expected to be "considerably lower than in 2009." In March, Bulgari said it was cutting jobs, reducing the number of products and closing unprofitable stores after the company’s earnings fell 45.1 percent in 2008.
The company also says it is working on new products to celebrate its
125th anniversary and working on increasing branding during the downturn.
That means we'll probably be seeing more Bulgari pieces on the red carpets this year. The other area of focus for the company is Asia, which accounts for 43% of its revenues. On the other side of the world, the U.S. market was described as a "catastrophe."
