From Home Furnishing Business
Natuzzi Sales Fall 11.4% as Net Loss Increases
Leather upholstery major Natuzzi (NTZ) said worldwide sales fell 11.4% in the quarter ended Sept. 30 and the company’s net loss widened to 5.5 million euros (about $5.85 million) from 5.1 million euros (about $5.42 million) in last year’s third quarter.
However, the company said its gross margin increased to 34.3% from 32.7% a year ago, and said recent efforts to reorganize its manufacturing and marketing programs appear to be working.
Net sales in the most recent quarter totaled 102 million euros, or about $108.5 million. That was down from 115.1 million euros, or about $122.4 million in the same quarter last year.
“We have operated the third quarter of 2016 under our new strategy and organization and the results, although not visible in the net numbers yet, continue to improve,” said Pasquale Natuzzi, chairman and CEO. “Branded product is maintaining value in the market with a reduction in revenue as a response to competitor discounting. We remain focused on protecting the value of our brand, the most recognized high-end furniture brand in the world.”
He described order flow stemming from last month’s High Point Market as “extremely favorable” for the Natuzzi brand and the Softaly private label program.
“Early results of the evolving application of our new strategy remain encouraging and we continue to realign the organization along these new dimensions,” Natuzzi added. “In addition to the dedicated expansion in doors and direct merchandising, we have begun efforts to rationalize headquarters expense and are already seeing the benefit. We expect these efforts to result in a return to profitability in the near future.”
The company also said it recently acquired five Natuzzi franchised retail stores in Italy and seven in Florida as part of an effort to better control distribution of the brand.
For the nine months ended Sept. 30, worldwide sales totaled 332.6 million euros, or about $353.6 million. That was down 6.8% from 356.8 million euros, or about $379.4 million, in the first nine months of 2015.
The nine-month net loss totaled 6.7 million euros, or about $7.12 million. That was down from a loss of 18.3 million euros, or about $19.5 million in the first nine months of last year.