Unfavourable currency conditions and persistent price pressure affecting the US market in particular continued to affect demand for Natuzzi's products, with net sales down 13.1% on first quarter 2004. The world's leading manufacturer of leather upholstered furniture made a net loss of €3.5 million in the first quarter of 2005, compared with net earnings of €9.4 million in the same period of 2004. Reflecting shifting markets, upholstery sales in the Americas decreased by 24.7% on a quarter on quarter basis, whilst sales in Europe were down 4.5%. However, in the rest of the world, sales were up 1%. Ceo, Pasquale Natuzzi attributed the decline to weakening demand for furniture across the major markets and aggressive price competition from Eastern Europe and China. As part of ongoing efforts to become more efficient and competitive the board approved a restructuring plan which will include a temporary workforce reduction of 1,320 jobs by the end of 2005 across all departments. The measures are geared to reducing manufacturing costs in Italy. Pasquale Natuzzi stated 'Natuzzi is a solid company, but we have to act rapidly in order to be more competitive, recover profitability and regain market share especially in the medium-high end of the market where we are investing in the Natuzzi brand.'
