Natuzzi May Struggle to Meet Target as Furniture Demand Slips

April 28 (Bloomberg) -- Natuzzi SpA, Italy’s biggest furniture maker, said it may struggle to meet its 2011 sales target as a slowdown in real-estate sales curbs demand for the company’s luxury leather sofas and coffee tables.

“Our biggest challenge will be achieving the plan,” Chief Executive Officer Pasquale Natuzzi, who founded the company in 1959, said in interview at his Milan showroom. “This economic environment is very scary.”

The maker of sofas costing as much as $20,000 said last year it aims to lift sales to 1 billion euros ($1.3 billion) by the end of 2011 and reach an operating margin of 15 percent. Sales gained 5 percent to 666 million euros in 2008, and the company had a loss of 62 million euros, similar to the previous year.

The company, which also sells lamps, fabrics and ceramic accessories, competes with Italian furniture makers including Poltrona Frau and B&B Italia. Industry group FederlegnoArredo estimates Italian furniture consumption shrank 7.8 percent last year to 31 billion euros, including imported goods. Italy is the world’s largest exporter of sofas and tables.

Natuzzi, who was born in 1940 and opened his first workshop at 19, took back the CEO position when Aldo Uva resigned last month after just 9 months in the job. Uva, a former Nestle SA executive, was the second CEO hired from outside the company in two years. Each time, Natuzzi returned to the helm.

The company, based near Bari in southern Italy, has been listed on the New York Stock Exchange through American Depository Receipts since 1993. The Italian furniture maker has no long-term debt, which gives it an edge over rivals, the executive said.

“We believe we can convert this crisis into an opportunity,” said Natuzzi. “Many more brands are going bankrupt and can’t afford to survive,” he said.

The furniture maker may not have to cut jobs if it can meet it targets, Natuzzi said. The Italian government will likely provide an unemployment plan for 1,200 of Natuzzi’s 3,000 Italian workers that were temporarily laid off. The company employs about 7,320 people globally.