Bulgari: Poor Q4 Leads to 2008 Sales Decline

Bulgari flagship in RomeBulgari SpA said 2008 revenues fell 1.5 percent to $1.4 billion. Fourth quarter revenues declined 9.8 percent to approximately $401.3 million. Same store sales dropped 0.9 percent for the year and 15.5 percent in the fourth quarter.

“In the full year 2008, as a result of the worsening macroeconomic conditions, especially from the fourth quarter, all product categories registered a decrease in sales, with the exception of perfumes,” the world’s third- largest jeweler said in a statement.

The jewelry segment, the core business of the group, fell 2.6 percent to $577 million for 2008. In the fourth quarter, jewelry sales dropped 12.8 percent to $166.4 million.

Watch sales fell 10.5 percent for the year to $339.6 million and 21.2 percent to $92.6 million for the fourth quarter.

By region, in the Americas 2008 total sales fell 12.5 percent to $198.7 million for the year, while same store sales declined 6.7 percent. For the fourth quarter, total sales fell 4.8 percent to $63.7 million and same store sales dropped 9.3 percent.

In Europe, its largest market, 2008 total sales fell 1.4 percent to $542.6 million and fourth quarter sales declined 16.8 percent to $154 million. The company did not report same-store sales results in the region.

In Asia, total sales for the year increased 1.6 percent to $561.6 million with same store sales down 1.2 percent. For the fourth quarter, total sales declined 6.9 percent to $160.5 million with same-store sales down 20 percent.

The Middle East was the lone gainer for the Rome-based luxury jeweler with total sales up 9.1 percent to $81.5 million and up 11.1 percent in the fourth quarter to $24.3 million. Same store sales for the region were not provided.

“The nasty economic environment had a strong negative effect on the holiday season’s sales,” said Francesco Trapani, Bulgari Group chief executive officer. “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. 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. 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.”