(Adds details, background, CEO comments)
By Astrid Wendlandt
PARIS, June 26 Baccarat sales are
expected to remain in decline this year as market conditions
deteriorate in Europe even more than in 2013, the head of the
French crystal specialist told the company's annual general
meeting on Thursday.
Last year, Baccarat's sales fell 6.3 percent to 106.5
million euros ($144.7 million), and its 2012 operating profit of
4.68 million was followed by a loss of 6.67 million.
"The situation has worsened in Europe progressively and this
year even more so than last year," Baccarat Chief Executive
Daniela Riccardi said.
"If this situation does not improve, it will be very
difficult for us to have positive growth in reported terms," she
said, adding that the yen's weakness against the euro was also a
problem for the company.
Riccardi said the maker of crystal glasses, jewellery and
bottles for spirits such as cognac had been hit hard by China's
anti-corruption measures, which dented cognac sales in the
The CEO said the yen's depreciation against the euro hit
sales last year, once translated into euros, even though they
grew in underlying terms. The company makes a little over a
quarter of its turnover in Japan and about a quarter in France.
She also said Baccarat's jewellery sales, which fell 11
percent last year, had suffered from delays to product
Riccardi, who also sits on the board of Gucci-owner Kering
and previously worked for Diesel and Procter & Gamble,
joined Baccarat a year ago, following a succession of CEOs at
the company's helm since 2006.
Baccarat said Riccardi's base salary and bonus for 2014,
based on meeting certain objectives, would total 1.5 million
euros, and that she would receive 165,000 euros in rent
allowance and 35,000 euros for her children's education together
with other expenses such as a car.
Riccardi declined to say what her objectives for the year
were aside from improving the company's profitability.
However, she said that if market trends remained the same,
"it would be complicated for us" to return to profit at the net
and operating level in 2014.
Riccardi said she hoped moves to prune Baccarat's product
portfolio to 1,000 items from 6,000, coupled with marketing
around the brand's 250th anniversary this year would eventually
bear fruit and help it return to growth, both in terms of sales
She added that Baccarat, which is controlled by investment
firms Starwood Capital and Catterton Partners, planned to open a
luxury hotel in New York in December.
Baccarat shares, which have lost 5 percent so far this year
after climbing 32 percent in 2013, closed up nearly 4 percent on
Thursday at 216.95 euros, giving the company a market value of
180.2 million euros.
($1 = 0.7359 Euros)
(Editing by James Regan)