Italian furniture manufacturer Natuzzi has reported a decline in full year sales as well as an operating loss in a period of restructuring at the business.
According to its latest trading update for the year ended 31 December 2023, total sales reached €328.6m, reflecting a decrease of 29.9% compared to 2022, which benefitted from a €58.4m reduction in backlog.
Gross margin, net of restructuring costs, is of 36.3%, compared to 35.6% in 2022, while operating losses amounted to €2.1m, excluding the impact of restructuring costs, which totalled €7.4m.
“In 2023, we accelerated our restructuring, with one-off costs to reduce the workforce by 514 people,” Natuzzi said. “This resulted in a total reduction of 759 people from 2021 to 2023. This represents a reduction of 17.5%, leading to €22.6m in annual savings compared to 2021 labour cost.
“We invested €11.8m, of which €4.6m in retail expansion and €7.2m to upgrade production facilities, in addition to the above-mentioned restructuring one-off costs.”
In the UK, which is Natuzzi’s largest market in Europe, the company added: “We are working to reduce our presence in multi-brand distributors to focus and favour the performance of the 30 mono-brand stores, of which 13 Natuzzi Italia and 17 Natuzzi Editions.
“In Italy, we operate 78 stores, 12 of which are Directly Operated Stores (DOS), distributing our Natuzzi Editions collection under the historical local banner Divani & Divani by Natuzzi. We are working to elevate the positioning of our brand by leveraging the distinctive assets of our Group and collections, in contrast to local competitors who rely heavily on aggressive promotion and communication.”
Pasquale Natuzzi, Chairman of the Group, commented: “Market conditions for the furniture industry have remained challenging during 2023. It’s evident that the furniture industry faced extraordinary conditions in 2023, with major markets experiencing a significant slowdown in demand, following two consecutive strong years post-COVID. In this context, we continued investing to complete the transition to a lifestyle brand, with direct access to consumers through retail.
“This is a process I initiated about 20 years ago, which represented a profound transformation of the Group I founded 65 years ago as a manufacturing company, focused on the value segment of the market. Being globally recognized as a Brand in the high-end segment of the market and delivering a superior in-store customer experience has been a long journey that forced us to review our processes, competences, and industrial capabilities.
“I am now witnessing the progress of this hard work, which, in the current market conditions, is even more important to competing and reaffirming our leadership. Our team has been working with determination also to evolve our production and increase our operational agility, dealing with the industrial legacy of our origins.
“Drawing from my 65 years of experience, in times such as these, it’s imperative to persevere in investment to strengthen our commercial core assets while pursuing restructuring initiatives; this is the agenda our management has been focusing on in 2023.”
