Italy’s Gold-Plated Furniture Sales Recover From Lehman ‘Shock’

April 27 (Bloomberg) -- Italy’s furniture makers say demand started to recover in March after a six-month slump, shoring up the outlook for Giorgio Armani’s new 29,000-euro ($38,500) gold- plated desk.

“Lehman’s impact was a shock, and from October to February we were digesting bad news,” Rosario Messina, president of industry group FederlegnoArredo, said last week at the Salone del Mobile fair, which ends today. “In March, we saw a comeback.”

As the failure of Lehman Brothers Holdings Inc. last year spooked affluent shoppers, sales by Italy’s furniture industry fell 5.6 percent to 37.5 billion euros in 2008, according to figures from Salone organizer Cosmit. Italy is the top exporter of sofas and tables. Messina said the recovery since the end of February should be enough to keep sales in 2009 little changed from last year’s level.

Executives at companies from Armani Casa to Kartell said business has picked up. Armani showed his first golden desks at Salone del Mobile, which fills Milan’s restaurants and prompts some hotels to quadruple their rates. The convention also featured a 90,000-euro Flos lamp with Baccarat SA crystal, designed with Philippe Starck.

The rebound was especially pronounced in the industry’s home market, Messina said. FederlegnoArredo estimates Italian furniture consumption shrank 7.8 percent last year to 31 billion euros, a figure that includes imported goods.

‘Worst Behind Us’

A recovery for pricey sofas would belie the woe in the wider Italian economy, which may shrink 4.3 percent this year, according to the Organization for Economic Cooperation and Development.

“The worst is behind us,” said Carlo Luti, chief executive officer of Kartell, which presented a doll-size line of furniture in connection with Mattel Inc. in a joint anniversary celebration, their 60th and Barbie’s 50th. “We are continuing to invest because this is the time to conquer new markets.” The company declined to disclose specific figures.

Organizers of the fair, the world’s biggest furniture trade show, said vendors and designers requested about 30,000 square meters more space to showcase products than they could satisfy. Exhibit space can cost as much as 160 euros per square meter, excluding furnishings, about equal to a small apartment in Milan, according to Cosmit President Carlo Guglielmi.

The economic crisis hasn’t deterred Renato Preti, formerly managing partner of Bulgari SpA’s Opera investment funds, from joining with a group of investors to launch Skitsch, a new home furnishings brand that will also be sold online.

Cardboard Chairs

“There is demand for contemporary design, and Internet sales are growing,” said Preti, who owns 20 percent of the venture and is also its CEO.

While he was at Opera, Preti oversaw the expansion of B&B Italia, the nation’s largest furniture design company by sales. He spoke during an April 23 interview at Skitsch’s first outlet, which opened in Milan last week.

The store measures 600 square meters, has 13 windows and is down the street from the Bulgari hotel, where Preti hopes to capture business from international tourists as well as locals. Designers of the store’s chairs and tables include Bertjan Pot, the Campana brothers and Todd Bracher.

Skitsch is a name that implies the opposite of “kitsch” in Italian, where an ‘s’ in front of a word reverses its meaning. The brand’s offerings range from 50-euro children’s chairs made from cardboard to a mirrored credenza for 15,000 euros. Preti plans to open more directly owned stores in European capitals and expand elsewhere through local partners.

Fabrice Gouffran, head of Armani Casa, is introducing limited-edition pieces including lizard-covered bar units and desks. He wants the average price of individual transactions to keep increasing, even if fewer people are out shopping.

“It’s the people with higher spending power who are still shopping,” Gouffran said on April 24. “These customers more and more want to see new things, new materials, new products.”