Faded Jeweler Shines Again

There is a machine just inside the door leading out of Bulgari’s Rome workshop which is designed to scrub shoes clean as employees leave the shop and step onto one of Italy’s most ancient streets.

The point isn’t to turn out well-spiffed jewelers, says Francesco Trapani, but to reclaim errant gold dust.

Bulgari chief Francesco Trapani.

Mr. Trapani is Chief Executive of Bulgari, the high-end jewelry and watch maker founded by his family in 1884. The inflation of gold prices is a constant worry for the company, which saw the cost of the metal jump significantly in the last several years. With prices hovering at $1,000.00 an ounce, the small things (like a machine that collects gold dust from shoes) start to add up.

Mr. Trapani has long seen opportunities in the small things; he was the first Bulgari chief to expand into watches and perfume, and substantially increased the brand’s small-goods wares. $1,000.00 rings and bracelets account for nearly half the firm’s yearly revenue, edging out higher-end baubles (Bulgari offers a number of necklaces that top $70,000.00).

Bulgari’s watches are poised for an upswing too, despite having lately lost ground: they’re quartz watches and thus excluded from the stratum of Rolex and Panerai and the rest of the mechanical pantheon, being instead lumped in with mid-priced rigs from fashion houses like Gucci.

That form-over-function approach worked well for both companies in the 1990s but fell off soon after. In response, Mr. Trapani bought two venerable Swiss watch houses, Gerald Genta and Daniel Roth, hoping to infuse his own brand with some of their skill and artistry.

After hard going in 2009, Mr. Trapani seems to have set his family’s company on course for a profitable 2010. Already, second-quarter profit statements demonstrate an uptick in revenue. That performance, and the company’s presitge and cache, are attracting suitors. Swatch Group AG was recently rumored to have made overtures, and other sharks are circling. But Mr. Trapani isn’t interested:

“The company is not for sale. The family has no intention of selling this company we have proudly built and managed for 125 years.”


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