Natuzzi S.p.A. (NYSE:NTZ), the largest furniture house in Italy and the player with the greatest global reach in its sector, announced today that its Board of Directors has approved a Business Plan (the “Plan”) for the 2014-2016 period.
The Plan, which is anchored by the company’s foundational values of ethics and social responsibility and based on its points of strength (high brand awareness, innovation, industrial know-how and a global presence), has the following primary objectives: regaining market competitiveness, eliminating losses from operations by the fourth quarter of 2014 and spurring a new phase of growth in revenues, with a return to profitability beginning in 2015.
The company will seek to regain market competitiveness and eliminate losses through a restructuring phase that envisions:
1. Strong recovery of the competitiveness of its Italian operations, which will be accomplished through the joint efforts of the company, unions, government and Italian regions of Puglia and Basilicata in implementing the industrial reorganization plan that was agreed upon on October 10, 2013 and entails both investments and a reduction in production costs.2. Strong recovery of worldwide productive efficiency, which will be accomplished through the adoption of 24 industrial product platforms, which are the result of the re-engineering of existing models and the design of new models according to the new moving-line production process; and the complete implementation of the moving-line production process in all of the Group’s factories worldwide (in Italy, China, Romania and Brazil). 3. Efficiency improvements in the back office processes on a worldwide basis, through the implementation of a centralized shared service structure that has been designed to reduce costs and address unemployment among white collar workers in the company’s home region. 4. Efficiency improvements in the supply chain, through a reduction in inventory levels, optimization of transportation and a new logistics organization. 5. Rationalization of the retail network through the closure of 13 under-performing stores that are owned and managed directly by the Group. Beginning in 2015, the Plan foresees a gradual growth in revenues and a return to operating profit, through the implementation of: 1. A marketing and distribution strategy aimed at: a) capitalizing on investments in the Natuzzi brand, which will become the sole brand within the Group, and which, in 2013, remained the brand with the highest level of awareness in its sector among consumers of luxury goods;b) organizing its offerings into three lines of products: Natuzzi Italia, Natuzzi Editions and Natuzzi Re-vive;c) expanding the distribution of the Natuzzi brand through wholesale distribution channels and through the strengthening of the retail network, which will be developed under the “Natuzzi Italia” and “Natuzzi” names outside of Italy and Portugal and “Divani & Divani by Natuzzi” within those two countries;d) reinforcing the division dedicated to the sale of unbranded/private label products to mass-market dealers. 2. A commercial strategy that is focused on increasing sales in markets with high growth rates and in those mature markets where the Natuzzi brand is most recognized, as well as defending market share in Europe. 3. Strengthing investments in marketing and communications. 4. A new commercial organization, both at a centralized level and in local markets, that is calibrated based on growth forecasts. Pasquale Natuzzi, founder, President and Chief Executive Officer stated, “This Plan is the culmination of an enormous effort over the last three years and is being adopted in the context of greater changes that we have implemented over the last ten years. During the last decade, we managed the challenges imposed on us by globalization with consistency, investing in the Natuzzi brand, the opening and development of the retail network, the upgrading of production facilities in Italy, the opening of factories and commercial offices abroad, integrating processes with the adoption of a single management information system (SAP) and the innovation of products and processes.” “All of this was achieved despite a decade that was marked by an unfavorable macroeconomic environment, a strong euro and a significant drop in the consumption of durable goods. Today we are the only global player in our industry that operates in over 123 countries and Natuzzi remains the most globally-recognized furniture brand among consumers of luxury goods.”