By NELSON D.SCHWARTZ


ROME - With a world-weary sigh, Francesco Trapani slips off his $10,000 steel and white-gold Bulgari watch, revealing the band’s dull underside. Bulgari once polished it to a fine gleam to match the shiny exterior.

The change is a subtle one, but it captures the cost-consciousness that the first recession in luxury-goods sales in nearly 20 years has forced on companies like Bulgari, Burberry, Cartier, Montblanc and other top designers, a modification of their traditional focus on glamour and glitter.

The challenge is as delicate as polishing one of Bulgari’s hallmark gems. In Bulgari’s case, if Mr.Trapani, the company’s chief executive, cuts too deeply, he risks harming the brand’s image of opulence and exclusivity, carefully honed over decades and reinforced by stars like Nicole Kidman, Charlize Theron and Scarlett Johansson, wearing Bulgari on red carpets at Cannes or the Oscars.

“Instead of talking about stars and spending, you think about cutting costs,”Mr.Trapani said during an interview in his office overlooking the Tiber.“Luxury is not immune.”

Economizing does not come naturally to Mr.Trapani,51. He is a skilled yachtsman whose wife is a princess from Liechtenstein. Until now, his claim to fame was transforming Bulgari from a handful of boutiques founded by his great-grandfather into a worldwide luxury powerhouse.

But with the company’s profit plunging 44 percent in the most recent quarter, and its stock suddenly tarnished, he has no choice.

Since the 1990s, sales of luxury goods have exploded, along with the growth of a new global elite, turning once little-known European brands into giants and transforming chic addresses like Fifth Avenue, Bond Street and the Champs-Elysees into veritable open-air malls for the affluent.

Few brands epitomized this trend better than Bulgari, which has grown to 259 stores from just 5 when Mr.Trapani took over as chief executive in 1984. Demand for Bulgari’s bold combinations of sapphires, diamonds and emeralds seemed insatiable as sales boomed worldwide, lifting the company’s revenue to more than 1.1 billion euros, or $1.41 billion.

Even as Wall Street collapsed this fall, Mr.Trapani presided over the star-studded opening of the flagship Bulgari store in Paris, and the debut of its first company-owned boutique in the Middle East, with separate parties for men and women in Qatar.

Now, reality has caught up with Bulgari and the rest of the industry. Sales at the 125-year-old jeweler rose an anemic 2 percent in the third quarter. Analysts are pessimistic about a recovery in its current fourth quarter, a period that is responsible for an outsize portion of the company’s annual results. And demand for luxury goods is expected to drop by 3 to 7 percent next year, according to a recent study by Bain & Company, the first time the sector has recorded an annual sales decrease since Bain began tracking it in the early 1990s.

There is no sign of a pre-Christmas rush at Bulgari’s boutique on the Via Condotti, where Richard Burton once bought diamonds for Elizabeth Taylor, and where unique pieces start at 70,000 euros, or $88,900.

“It’s not politically correct to show off in this environment,”said Claudia D’Arpizio, a partner at Bain who specializes in luxury goods.“Even if they’re not affected in terms of purchasing power, consumers feel it’s ethical to spend less. They don’t want the additional piece of jewelry.”

Then there are slight adjustments - like the unpolished watch band - that may save only a few euros an item but add up at a company that sells thousands of timepieces annually, most priced from $4,000 to $32,000. Or introducing lower-cost boxes and bottles for Bulgari’s perfume line, which Mr.Trapani said customers will not notice.

“We want the best solution for both the eye and the cost,”Mr.Trapani said.“The challenge is to cut costs and diminish expenses, without negatively affecting the image of the brand or the quality.”

Of course, demand for the most expensive ornaments has not disappeared entirely. During a recent visit, three of the craftsmen were busy finishing customordered pieces, including cufflinks featuring Greek coins from the fifth century B.C. and a pair of pendant earrings heavy with diamonds and sapphires.

“We won’t change the game of life, thank God,”said Nicola Bulgari, 67, Mr.Trapani’s uncle and a vice chairman of the company.

“It’s part of the joy of life to wear jewelry, for the man and his ego. It is a world of fantasy and folly. Men will always be in love with women and want to make them happy.”