Natuzzi loses a fifth of sales in second quarter; Makes net loss of 3.9m euros

30th September 2009 | upholstery | Natuzzi's sales in Europe have fallen by 19.6% in the second quarter of 2009, although cost cuts helped the firm improve its gross margin compared with the same period last year.

The upholstery manufacturer and retailer said the savings came in development costs and through improved manufacturing efficiencies and resulted in an operating profit of 1.1m euros. It made a second quarter operating loss of 5.1m euros in 2008.

This was achieved despite average sale prices for Natuzzi branded goods dropping 4.5% and a 5.8% cut in average sale prices for its volume Italsofa brand. Natuzzi sales in Europe in Q2 were 72.2m euros - down from 89.9m euros last year.

Sales of its premium Natuzzi branded sofas dropped 23.6% while cheaper Italsofa upholstery revenue fell 12.7%. Average sale prices fell to 391.9 euros/seat for Natuzzi and 185.2 euros/seat for Italsofa.

Worldwide upholstery sales fell 21% to 116.9m - with Natuzzi branded sofas dropping almost 40% across the Americas. Pasquale Natuzzi, chairman and chief executive, said he was confident the company would achieve its stated aim of a 15% operating margin by 2011.

Natuzzi has also vowed to cut lead times across all its markets by 20-30%.