Moet Hennessy Louis Vuitton SA. Arabian Watches and Jewellery Magazine is proud to reveal that it’s the first publication to bring you exclusive interview of Trapani following the merger. Trapani, who was instrumental in the whole merger process and is also expected to play a vital role in the post-merger period, shares with us further growth prospects for the company. Excerpts:
You had forecast big rise in profits in 2010. Did the results meet your expectations?
Sales achieved by the Bulgari Group in the fourth quarter of 2010 were 357.8 million euros, up 20.5 per cent at current exchange rates. These figures confirm the progressive growth in sales already recorded in previous quarters. Results for the first nine months of 2010 showed a turnover rise of 13 per cent at current exchange rates, thanks to an excellent performance of jewellery and accessories. The notable surge in profitability was in line with our plans and clearly showed that the company continues to improve in terms of products and image. It also successfully managed investments, indebtedness, inventories and costs.
Where do watch and jewellery lines stand in new merged entity?
In the first nine months of last year, jewellery sales rose by 18.1 per cent at current exchange rates – thanks to excellent sales performance of the B.zero1 line and of the Serpenti collection.
Watch sales decreased by 1.4 per cent although there was not a fair basis for comparison since, for example, last year the delivery of new products began in September and continued in the three subsequent months, while in 2009 the new launches were already available starting from the second quarter. This can already be noted by analysing the October 2010 sales data, which, in fact, showed a six per cent growth. It is also appropriate to highlight the excellent reaction reported to the women’s Serpenti watch collection and to the new Bulgari Roth and Genta models presented in Basel.
How did the Middle Eastern market perform in 2010?
In the last few years, Middle East has become a very interesting market because some countries are very dynamic and extremely aggressive in investing money thus totally transforming their market environment. Dubai, for example, is the most sophisticated market of the area and has become an important destination for tourism. Another very interesting area is Qatar, where Bulgari recently opened its first directly-owned store in Doha, while in the rest of the Middle East we operate through an effective network of franchisee and travel retail stores. An additional important factor is the oil business, which generates high incomes. Therefore the potentialities of this market are huge, since you have a relatively small number of people compared to other markets but with significant disposable incomes. Moreover, people here are traditionally fond of luxury items and high-end jewellery and accessories in particular. Bulgari’s figures, in fact, show that in 2009 - during the economic crisis which affected the worldwide markets - Middle East registered a 12.2 per cent growth at current exchange rates and also continued to show a good performance in 2010. In conclusion, there are many reasons and opportunities for Bulgari to invest in the area and further improve its competitive position.
How well Daniel Roth and Gerald Genta gel into new merged entity?
This process is impacting positively at all levels and benefitting both our Haute Horlogerie Manufacture and Bulgari. The entity now offers a brand new range of very high-end and sophisticated products; while Daniel Roth and Gerald Genta movements expertise got the awareness and recognition they deserve.
How do you view the makeover of Bulgari watches with this partnership?
Bulgari has preserved the DNA of both names retaining their distinctive shapes and designs which are clearly in both cases a strong signature symbolizing definitely their essence and history. The Bulgari spirit is bringing its own style through re-designed dials such as those we introduced last year at Basel. Furthermore, we will keep developing strong added-value contents in terms of creativity and high-end manufactured mechanical movements respecting what they basically were in the past and what we intend to do in the future.
How will you attract the attention of traditional watch connoisseurs or collectors with the new lines?
Our customers are men and women who appreciate Bulgari’s Italian heritage, bold and innovative style, combined with our master craftsmanship and designs. More in detail, the male segment in the Bulgari assortment has been strongly upgraded over the last 5-6 years in light of great demand of our exigent male customers. Through the integration of the Roth & Genta brands into the collection of the Bulgari brand we put all our means to only one objective: serve and please the most demanding male clients with timepieces of undisputable quality, prestige and appeal. As a result, I can say that the integration in the Bulgari watch collections has raised strong positive reactions worldwide and hope this enthusiasm will continue for many years to come.
How many movements do you produce each year?
We do not disclose any figures about that matter.
Following the merger, do you plan to increase the production?
The vertical integration strategy has allowed us to nourish our watches, significantly increase the watch-making content in all its components. Now there is continuity with the Daniel Roth and Gerald Genta assortments in the Bulgari collection and our vision is to continue developing medium- and high-end watch segments and upgrade the technical content.
What are the most interesting markets?
Of late, Greater China has become a big opportunity for everybody and for Bulgari as well – accounting for 18.3 per cent of our sales in the Q3 2010, second only to Japan. We are, therefore, aggressively investing there, both on a distribution level and communication.
What can we expect to see in Basel 2011?
With the new collections presented in Basel we will exploit our great potential, responding in the best way to the objective of serving watch lovers with the most appealing and qualitative timepieces.
Is firm immune from any further economic crises?
The crisis hit the company both on the demand for goods and services and in the wholesale channel because of a massive de-stocking. Notwithstanding, having faced equally challenging situations in the past, the company coped with this difficult moment carrying out a strategy focused on a strong cost and investment control, improvement of efficiency and on a strong commitment on creativity and brand image. It is also working hard to provide an even more competitive offer and further stimulate demand. Sometimes a crisis can be an opportunity to evolve and to improve some aspects of the business in order to make a company more efficient and competitive. In our case, the strategy carried out to face the crisis successfully led the company to become a mix of creativity and discipline which, I am sure, will continue to have positive effects.
How unique are your products?
By the diversification we wanted to offer our customers to experience the brand in different ways as an expression of the excellence that has always permeated our jewellery creations. It means first of all respecting our strict standards of quality, design and craftsmanship and to this aim we pursued a strategy based on two pillars: a winning product offer and the virtualisation, in order to better control the whole production process, from the research and development phase to distribution. In conclusion, jewellery is and remains our core business, but our ambition is to become the most prestigious luxury brand in the world for all categories the company holds in its product portfolio. And being constantly focussed on quality is what makes a successful diversification, since it is not just an addition of products but an enrichment of the product assortment through high-end creations and services to the benefit of brand awareness and image.