The dangers hidden inside Natuzzi’s +7.8% of the second quarter

The dangers hidden inside Natuzzi’s +7.8% of the second quarter

A situation to be monitoring with extreme attention is developing in Santeramo in Colle. Because while Natuzzi’s consolidated results during the 2nd quarter are equal to 116.9 million euro. It means a 7.8% increase on yearly basis and a +26.8% on the same period of 2019. But the problem is tied to the details of the revenue. Antonio Achille, CEO of Natuzzi, estimates that the shutdown of the production site in Shanghai is worth 15 million, as it stopped from March to the start of May 2022 and has only since June gotten back to producing at capacity. The closing in China caused a domino effect on the North American market, where orders diminished due to more cautious consumers and a trend of retailers selling what was already in stock. Going back to China, 18 Natuzzi stores remained closed from March to May 2022 due to lockdowns.

Natuzzi’s 2nd quarter

Overall, Natuzzi’s incoming orders decreased at the end of June 2022. From 114 million euro at the start of 2022 to 102 million. The main victim is Natuzzi Editions. While Natuzzi Italia, the luxury brand of the group, still benefits from consumers with high spending power. Looking at aggregated data for the first 6 months, Natuzzi’s revenue was of 235.4 million euro (+12.1% compared to the same period of 2021). Operating profits were at 32.8%, from 36.2% and 29.1%, recorded in the first 6 months of 2021 and 2019 respectively.

Change of pace

Natuzzi needs an additional change of pace. It needs it to face the negative combo (after Covid) of war and energy price increments, confiding in the inversion of price trend when it comes to transportation. Among the short-term actions is also the application of Factory 4.0 inside Chinese, Brazilian and Romanian production sites. “Since April 2022 we have had to face – says the president of the company, Pasquale Natuzzi – a series of factors such as global inflation, war in Europe, and the continuation of the Covid pandemic.

This market period encourages us to accelerate the transformation of the Natuzzi group”. The promotion by Domenico Ricchiuti, Global Chief Operations Officer, is part of this logic, as is the entrance of two new managers from the luxury segment in Natuzzi: Emanuele Cheli, from Versace and Prada (15 years) and Rita Valerio, for 15 years in Vuitton, who will take on the country manager role for the Iberian Peninsula.

Murgia’s negative feeling

Meanwhile, the contraction of orders has caused the Murgia area to have negative feelings. Natuzzi met unions Cobas-Lp and Usb-Lp on October 3rd at the Confindustria site in Bari. Topic: the suspension of orders to third-party manufacturers in the Gravina area in Puglia. Unions are challenging Natuzzi following the decision to reduce hours and they believe that the brand will potentially move additional parts of productions to Romania.

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