• Larry Thomas

Natuzzi sales fall 7.5% in third quarter; net loss widens

SANTERAMO EN COLLE, Italy — Leather upholstery major Natuzzi said worldwide sales fell 7.5% in the third quarter, and the company's net loss more than doubled to $24.8 million.

The company blamed the declines on weak economic conditions in most of the regions it serves, but said a restructuring plan that got underway in earnest in October should produce improved results in the future.

Worldwide sales totaled $136.8 million, down from $147.9 million in last year's third quarter. The company said sales in Europe fell 8.2%, while sales at High Point-based Natuzzi Americas were off 11.2%.

The quarterly net loss, which equals 45 cents per share, compares with a loss of $6.9 million, or 13 cents per share, in the same quarter last year.

"We believe that we have taken the right decisions for the future of our company and created the conditions for a turnaround starting from next year," said Pasquale Natuzzi, chairman and CEO.

Key elements of the restructuring include the closing of one factory in Italy and the layoff of about 1,500 Italian workers.

"We will concentrate our efforts during the last weeks of the year on the finalization of the five-year business plan that, starting from a new brand and distribution strategy, will put the Group in conditions to recover profitability," said Natuzzi.

The company's founder also said the new Re-Vive recliner, which was unveiled with great fanfare at last month's High Point Market, will be a key sales driver.

"Our intention is to penetrate the strategic recliners market ... and then create and become the leader of a new market segment: the ‘performance recliner,'" Natuzzi said.

For the first nine months of the year, worldwide sales fell 4.2% to $430.8 million. The nine-month net loss totaled $51.1 million, or 93 cents per share. That was up from a loss of $18.4 million, or 34 cents per share, in the first nine months of 2012.

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