Bulgari results affected

Besides Bulgari's perfumes lines, all product categories registered a sales decrease for 2008; jewellery fell by 1.5% and watches and accessories by 10.9% and 4.1% respectively. Due to the worsened macroeconomic conditions, which became especially difficult for Bulgari in the fourth quarter of the year, only its perfume sales went up with 13.9%. The Group’s consolidated turnover for the full year 2008 reached 1,075.4 million Euro, compared to 1,091.0 million Euro in 2007 (-0.9% at comparable exchange rates and -1.4% at current exchange rates).

As far as geographical areas are concerned, Europe decreased by 1.4% and Americas by 6.7% while Asia limited its fall to 1.2%: as Japan declined 8.5%, in fact, the rest of Asia posted a 8.4% growth. Middle East/Other registered a 9.1% increase at current exchange rates. The number of Bulgari stores at 31 December 2008 was 263, of which 164 were directly owned stores.

Bulgari's gross margin, which went from 701.4 million Euro in 2007 to 691.3 million Euro in 2008 (-1.4%), remained stable in 2008 in terms of percentage ratio on turnover (64.3%), despite the unfavourable product mix. The stability of the margin has been secured by increasing vertical integration, increasing production efficiency and due to the Euro depreciation in the last part of the year. It is also important to note that in 2008 the Bulgari Group has raised selling prices, in particular for jewels and watches, after the increase in the prices of gold and other raw materials. In the fourth quarter, the Company has not reduced its selling prices or changed its discount policy versus the final client and trade in order to protect the integrity of the brand in the long term.

Francesco Trapani, Chief Executive Officer of the Bulgari Group, thus commented: “Notwithstanding the more cautious attitude on investing and spending in effect since the start of 2008 to face the progressive worsening of the economic conditions, the drastic and sudden sales shortage occurred during the last quarter as a consequence of the financial crisis and the collapse of the worldwide Stock Exchanges has very negatively affected the full year results. 2009 will be a very difficult year as well and our commitment will be focussed – in addition to new product launches in all product categories – on managing the cost base even more rigorously to make the Group more and more efficient."

Image: Bulgari