by HIGH POINT — Italian upholstery manufacturer Natuzzi said this week that it plans to sell its Casa Italia showroom here as part of an effort to restructure its business in Italy and also help accelerate its retail expansion in the U.S.
First reported by the Business Journal of the Triad, the news also was cited in remarks made by group CEO Antonio Achille relating to the company’s third-quarter earnings report released Monday.
According to the earnings report for the quarter ended Sept. 30, the company had consolidated revenues of 74.9 million euros, down 35.7% compared to 116.6 million euros reported in the third quarter of 2022 and down 14.9% from the 88.1 million euros reported in the third quarter of 2019.
Upholstery and other home furnishings invoiced sales totaled 73 million euros during the quarter, down 35.9% from the 114 million euros reported in the same period last year. In the North American market, upholstery and home furnishings sales were down 42.5% during the quarter, to 21.5 million euros, compared to 37.4 million euros the same period last year. The only area of the world with a higher percentage drop was China where sales decreased 58.1% to 8.4 million euros compared to 20 million euros in the same period in 2022.
During the third quarter, the company reported an operating loss of 1.3 million euros compared to operating income of 4.1 million euros in the same period last year.
Of the sale of its Casa Italia building at 130 Commerce Ave. along with other “nonstrategic” assets, Achille said during its conference call that the company is in ongoing discussions for the sale of the High Point building with a potential buyer and is close to entering a due diligence period. “The proceedings from these potential divestitures, in case they materialize, will be strategically directed to accelerate our retail expansion, focusing on North America, and to support our restructuring, particularly in Italy.”
He added that the main contributor to the group’s overall operating loss was the decline in revenue during the first quarter.
“The current business environment markedly differs from the previous year, which experienced a surge in demand following the pandemic,” Achille said. “Consequently, we did not deliver enough revenue to break even. We are working to both sustain top-line with a set of specific actions by each geography and to continue reducing our break-even point by finding new sources of efficiency through a more agile industrial footprint.”
“As the duration and intensity of the furniture industry’s current weakness remains uncertain, it becomes paramount, as we approach 2024, to focus our efforts on tightening cost control and increasing financial discipline to ensure that we can navigate this challenging business environment with resilience.”
In its report, the company also said that enhancing gross margin is another top strategic priority. During the third quarter, its gross margin was 35.4% compared to 37.7% in the same period last year and 28.7% in the third quarter of 2019.
