Leather upholstery producer and Italy's largest furniture manufacturer, Natuzzi S.p.A, has announced a restructuring plan for the company, in order to reduce costs and improve competitiveness. The plan includes a temporary workforce reduction of 1,320 by the end of 2005, across all departments, with a focus on reducing manufacturing costs in Italy, increasing overall efficiency and improving productivity.
This has come about as a result of unfavourable currency conditions and price pressure in the US market, as well as poor economic in Europe. Preliminary sales figures for the first quarter of 2005 show that net upholstery sales decreased 14.0% to €145.7 million. Natuzzi expects sales of Natuzzi branded upholstered furniture to decrease by 18.4% and sales of Italsofa, the promotional brand, to remain substantially flat. In terms of seats sold, Natuzzi expects a 13.1% decrease, with the Natuzzi brand selling 21.0% units less than in the first quarter of 2004.
Pasquale Natuzzi, CEO and chairman, commented, "After having carefully analysed the current situation and the unstable market outlook, we have decided to take further initiatives to control costs. Natuzzi is a solid company, but we have to act rapidly in order to be more competitive, recover profitability and regain market share especially in the medium-high end of the market where we are investing in the Natuzzi brand."
More details of the restructuring plan should be announced by the end of May.
