Natuzzi’s upholstery and furnishings net sales amounted to €101.1 million in the first quarter of 2019, down 8.2% year-on-year due to a 9.1% decrease in upholstery net sales (at €90.7 million) and a 0.3% increase in furnishings sales (at €10.4 million). Other Group sales were €5.1 million, versus €6.4 million in the first quarter of 2018. Consolidated gross margin was 30.1%, up from 28.2% in the previous year first quarter, mainly attributed to a “favourable trend in raw material prices over the period and a better sales mix, notwithstanding decreasing revenues”. The Italian Group reported an operating loss of €3 million, compared with an operating loss of €3.3 million a year ago.
“The experience made directly with consumers over the last three years told us that the most efficient way to communicate the brand values and the relevant positioning of our products relies on the development of a controlled distribution that is a mono-brand stores network. On the contrary, the wholesale channel, whose main driver remains essentially the price, does not allow for the right capitalisation of the brand and retail experience”, said Pascale Natuzzi, Chairman and CEO, Natuzzi.
Going forward, the Group said it plans to expand its mono brand stores network internationally, particularly in the key markets of the U.S., China and the UK, despite the trade tensions between the U.S. and China and the ongoing uncertainty surrounding the Brexit negotiations, which are said to be affecting Natuzzi’s operations in 2019. As reported by ILM, Natuzzi’s re-organisation of its Italian industrial operations started in April and the manufacturer has begun to shift volumes of production from Italy to its Romanian plant in a move aimed at improving labour costs.
