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ROME -- The industry that brought you bling is losing its luster.
Jeweler Bulgari SpA said sales fell to 312.6 million euros ($410.7 million) in the fourth quarter, a 10% decline from a year earlier. At Swiss watchmaker Swatch Group AG sales fell 6% in the second half. Neither company announced profit for those periods.
The timing of the sales downturn is a particular blow to the jewelry and watch industry, which traditionally counts on the months leading up to the holidays for customers to make expensive purchases. Cie. Financiere Richemont SA and Tiffany & Co. earlier this month also reported sales declines for the end of the year.
Bulgari Chief Executive Francesco Trapani blamed the global financial crisis for the sales drop, adding that the company had refused to lower its prices to help lift sales. "When the market is so bad, these activities are very little effective, and they can damage the prestige of the brand," he said Thursday.
As sales decline, Bulgari's finances are coming under pressure. Bulgari Chief Financial Officer Alberto Nathansohn said the jeweler was in talks with banks to gain extension on Bulgari's debt load. More than half of the jeweler's 306 million euros in debt is expected to mature over the next 12 months. "I will feel a lot more comfortable when I have the cat in the bag," Mr. Nathansohn said in a conference call with analysts.
For the Swiss watch industry, where sales have grown by double digits in recent years, November was once the busiest month of the year, according to the Federation of Swiss Watchmakers. Last year, however, Swiss watch exports fell about 12% in November from October, to 1.5 billion Swiss francs ($1.3 billion), the federation said.
Swatch, which owns the Omega and Breguet brands, said sales of pricey watches that previously had defied the downturn were softening. "Even the luxury brands could not entirely escape this unfavorable trend," the company said.
The watchmaker said retailers who buy from Swatch wholesale have begun to rein in their orders, causing "a noticeable drop" in demand in the last two months of last year. However, Swatch said it expected overall sales to climb this quarter from the previous quarter. It also projected higher revenue for the year.
For Bulgari, emerging markets that once fueled growth have begun to sputter. Revenue from Asia, excluding Japan, fell by 7% to 55.4 million euros in the fourth quarter.
Sales in Bulgari's traditional markets continued to slide. Revenue fell 4.8% to 49.5 million euros in the Americas and fell 7% to 69.2 million euros in Japan. The Middle East was the only region where sales increased, by 11% to 18.9 million euros.
Jeweler Bulgari SpA said sales fell to 312.6 million euros ($410.7 million) in the fourth quarter, a 10% decline from a year earlier. At Swiss watchmaker Swatch Group AG sales fell 6% in the second half. Neither company announced profit for those periods.
The timing of the sales downturn is a particular blow to the jewelry and watch industry, which traditionally counts on the months leading up to the holidays for customers to make expensive purchases. Cie. Financiere Richemont SA and Tiffany & Co. earlier this month also reported sales declines for the end of the year.
Bulgari Chief Executive Francesco Trapani blamed the global financial crisis for the sales drop, adding that the company had refused to lower its prices to help lift sales. "When the market is so bad, these activities are very little effective, and they can damage the prestige of the brand," he said Thursday.
As sales decline, Bulgari's finances are coming under pressure. Bulgari Chief Financial Officer Alberto Nathansohn said the jeweler was in talks with banks to gain extension on Bulgari's debt load. More than half of the jeweler's 306 million euros in debt is expected to mature over the next 12 months. "I will feel a lot more comfortable when I have the cat in the bag," Mr. Nathansohn said in a conference call with analysts.
For the Swiss watch industry, where sales have grown by double digits in recent years, November was once the busiest month of the year, according to the Federation of Swiss Watchmakers. Last year, however, Swiss watch exports fell about 12% in November from October, to 1.5 billion Swiss francs ($1.3 billion), the federation said.
Swatch, which owns the Omega and Breguet brands, said sales of pricey watches that previously had defied the downturn were softening. "Even the luxury brands could not entirely escape this unfavorable trend," the company said.
The watchmaker said retailers who buy from Swatch wholesale have begun to rein in their orders, causing "a noticeable drop" in demand in the last two months of last year. However, Swatch said it expected overall sales to climb this quarter from the previous quarter. It also projected higher revenue for the year.
For Bulgari, emerging markets that once fueled growth have begun to sputter. Revenue from Asia, excluding Japan, fell by 7% to 55.4 million euros in the fourth quarter.
Sales in Bulgari's traditional markets continued to slide. Revenue fell 4.8% to 49.5 million euros in the Americas and fell 7% to 69.2 million euros in Japan. The Middle East was the only region where sales increased, by 11% to 18.9 million euros.
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