Italian jeweler Bulgari would find it “difficult but realistic” to increase sales by 8-10 percent this year as some analysts expect, Chief Executive Francesco Trapani said on Thursday.

 

In an interview with Reuters, Trapani also said market forecasts that 2003 net profit - due to be released next month - should come in at 83 million euros ($104 million) were realistic and the figure could be higher. In 2002 Bulgari made a net profit of 76.1 million euros.

 

Jewelers around the world suffered badly last year from the twin impact of the war in Iraq and the SARS virus, and Bulgari in January posted a worse-than-expected 1.9 percent drop in sales to 759.1 million euros.

 

“The financial community is expecting our 2004 sales to go up by between 8-10 percent at comparable exchange rates,” Trapani said.

 

“This is certainly a very aggressive target because we know that the general atmosphere, although it is better than a year ago, is still quite difficult,” he added.

 

“But I think this objective is still realistic -- difficult but realistic -- as long as we don't see any major exceptional negative events like the (Iraq) war or another disease like SARS last year.”

 

Trapani said the outlook for the U.S. and Japanese markets was encouraging. "The momentum in the U.S. is positive," he said. Bulgari's sales in the United States grew by 21.2 percent on a constant exchange rate basis in the fourth quarter of last year.

 

Referring to Japan, which makes up 22 percent of group turnover, Trapani said: "If I look at sales at my stores, Japan was very positive in December and also in January. Japan remains a very, very good market."

 

Trapani said the impact of the weak dollar on Bulgari's business has been mixed.

 

On the negative side, the weak dollar means Bulgari needs to increase its selling price in the United States to protect its gross margins, he said.

 

But the company benefits by spending less in euros to acquire dollar-denominated gold and diamonds - its raw materials.

 

Trapani said he expected Bulgari to raise prices in the United States in 2004 to defend its margins, but he could not say by how much.

 

The chief executive said it was too early to say whether the Asian-wide outbreak of bird flu would have a significant impact on Bulgari's business by discouraging travel.

 

“For the moment it appears to be a small problem, under control, but we have to wait and see the developments,” he said.