Sagging Dollar Leads Natuzzi to Loss on Rising Sales

May 28, 2008  by in UnCategorized   

By Home Furnishings Business in Upholstery on May 2008 Natuzzi, Italy’s largest furniture manufacturer, saw net sales increase 12.4 percent in its first quarter, but the company announced Wednesday that the falling value of the U.S. dollar and other factors contributed to a net loss of 23.4 million euro. The company posted a net loss of 4.7 million euro in the same period of 2007.

Chairman and CEO Pasquale Natuzzi said, “The negative performance was due to the strong price pressure, especially in the U.S. Market where the furniture industry is still struggling to come out of one of the worst crises of the last decades, and the sharp devaluation of the U.S. dollar against the currencies of countries where we manufacture.”

He said the company announced price increases in March across all of its brands that should enable the company to recover margins. He said the company continues to reduce costs, including improving manufacturing efficiency and “right sizing” the number of employees in factories in Italy, where seat order flow is down about 10 percent.

Natuzzi is also focusing on the development of markets in Eastern Europe, the Middle East, China and India that have been seeing increasing sales.

“We will continue to invest in Natuzzi brand awareness worldwide and closely monitor the profitability of our retail activities (and may) close our non-performing units,” Natuzzi said.

The company operates more than 300 Divani & Divani by Natuzzi and Natuzzi stores worldwide.