Italian jeweler Bulgari on Wednesday reported a drop in 2001 net income, but said it expects significant profit growth this year, Reuters reported.

In a statement, Bulgari said net profits fell 29% in 2001 to $59.4 million (68.2 million euros) as the economic slowdown and the September 11 attacks on the United States sapped demand for big-ticket purchases like the company’s baubles.

The luxury world’s ongoing love affair with accessories helped Bulgari along with a 48% increase in sales. Jewelry sales rose 26%, watch sales fell 6%, while perfume, including the new BLV Homme, rose 37%.

“I hold that 2002 will be a transition year,” Chief Executive Francesco Trapani reportedly said in a statement, “with another increase in sales volume, albeit it a limited one, and careful cost controls, which will allow us to have significant growth in profits.”

The Rome group had previously said a worse than expected Christmas pushed fourth-quarter sales down 6%, squeezing full-year sales to $667.2 (766 million euros), up 13%.

Bulgari’s sales were lop-sided through its worldwide markets, with a 16% fall in the United States playing off a 59% rise in the Middle East, 24% in Europe and 17% in the lucrative Japanese market.

Bulgari said its operating margin had been squeezed to 13.3% in 2001 from 18.2% the year before, hit partly by a 24.3% increase in marketing as it launched a new scent and its “Lucea” jewelry line.

JCK