Feb 17, 2014
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Damiani receives buyout interest despite losses

Feb 17, 2014

MILAN, Italy - Italian jeweller Damiani is approached by would-be investors almost every month, despite struggling to return to profit, but does not plan to sell, its chief executive said. "People who have said they are interested in buying the company, or a big chunk of it...we have one almost every month," Guido Damiani told Reuters on Friday.

"There are so many, from big groups to private equity, and even names I had never even heard of before," said Damiani, whose grandfather Enrico started designing jewellery in 1924.

The company said on Friday its operating loss for the nine months ended Dec. 31 narrowed to 2.2 million euros ($3 million) from 3 million euros in the same period a year earlier.

Damiani said the company was confident it would return squarely to profitability next year.

"Even though our numbers are negative at the moment, there is clearly strong added value from the brand," Damiani said. "We are one of the very few remaining independent names."

In 2011, French luxury group LVMH bought Florentine jeweller Bulgari. In 2013, France's Kering bought a majority stake in Rome-based Pomellato, and Italian private equity fund Clessidra took control of Bucellati.

But the maker of one-off pieces which can cost millions of euros is "absolutely not interested" in selling now, Damiani said, adding "we are a young company, and we like to work".

Damiani's trials have largely sprung from the fact that it makes 70 percent of its sales in Italy, where people are still reluctant to splash out on discretionary goods as the economy struggles to emerge from its longest recession in 60 years.

In a bid to return to profit, the jeweller is investing abroad, in countries including Japan, where sales grew over 30 percent in yen terms in the nine months, Damiani said.

Another area where Damiani sees potential sales growth is China - where it started opening directly-owned shops a year ago - despite a crack-down on gift-giving to bribe politicians which has hit sales of other so-called "hard luxury" products, such as watches.

Exports of Swiss watches to China dropped 15 percent in the first 11 months of last year. "People are more attentive to spending" in the wake of the crackdown, Damiani said, but "watches are a gift given to politicians whereas jewellery is given to women and most of those politicians are men, so jewellery is affected less." ($1 = 0.7307 euros)

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