Headline figures, sales Euro 328.6 million, down 29.9% over 2022, and a reduction after restructuring of 514 members of staff.
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.”
Antonio Achille, CEO of the Group, commented: “2023 has clearly been a challenging year for the overall industry. In the main markets of our operations, North America, China and Europe, the real estate, which is a primary source of new demand, has been stagnant, because of the negative economic situation and high interest rates. Consumers remained very prudent when it comes to invest in durable products. This has been reflected on our business, with a decrease in sales.
In this context, we continue working and investing in the two fundamentals pillars for our transformation: completing the transition to a brand-life style and restructure our operations.
Commercialy, Natuzzi today has completed the transition to a brand / retail group. 92.2% of our sales comes from Branded and 61.7% comes from retail. These percentage were respectively 85.3% and 52.2% at the beginning of 2021.
In 2023, with an acceleration in the last quarter, we have invested significantly to increase the control of our global retail and commercial operations. This has led to two initiatives, respectively aimed at improving the retail and the other at managing our galleries and wholesales business.
To improve retail performance, we have established the Global Retail Division under the leadership of Diego Babbo, a manager with more than 20 years’ experience in Retail.
This division is dedicated to modernizing and professionalizing our retail approach by developing tools to support our Regions and Dealers in enhancing the retail performances and elevate the in-store customer experience. We have standardized all retail related KPIs to accelerate the diagnosis of areas requiring immediate intervention to foster organic growth. Leveraging the experience we have matured in our direct stores, we now offer our franchising partners turn-key retail programs, which include IT systems, training, and guidelines on store layout, merchandising, and visuals. To improve the productivity of our DOS and Franchise partners we closed the tail of not performing stores.
Out of the 678 stores, 346 stores are located in China, of which 97 Natuzzi Italia and 249 Natuzzi Editions. We do not consolidate our China stores as they are part of our 49% stake in the joint venture (JV) we established in 2018. In 2023, we made significant investments to align the JV team with our modern retail approach and to ensure visibility into the JV’s performance at a granular level within our IT system. This allows us to support the local JV team in enhancing performance through strategic choices in stores layout, merchandising, branding, and customer experience.
Europe has been mostly exposed to the negative consumer dynamics in 2023. In UK, which is our largest market in Europe, 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.