UPDATE 1-Bulgari to raise prices this year -CEO

(Adds shares acquisition approval, closing share price)

ROME, April 18 (Reuters) - Italian jeweller Bulgari SpA (BULG.MI: Quote, Profile, Research) will raise prices this year to fight unfavourable exchange rates and high raw material costs, Chief Executive Francesco Trapani said on Friday. The Rome-based jeweller, for whom model Kate Moss has appeared in advertisements, raised prices last year because of a weakening U.S. dollar.

"Yes, we will raise prices by some percentage points," Trapani said on the sidelines of a shareholder meeting. "Gross margins are stable because we reduced costs and raised prices, but this was absorbed by the increase in raw materials and the exchange rate."

Trapani declined to comment on how business had gone in the first quarter. After a positive January and February, Trapani was quoted as saying this month that March sales had slowed because of the financial crisis.

Investors are watching luxury goods companies for any slowdown in spending on premium items as the credit crisis and falling financial markets rattle consumers.

"We will look at the first quarter later on," he said.

He added that in April the company had had a successful run at the Basel watch and jewellery trade fair, "a lot better than we would have thought and a lot better for Bulgari and for all other brands".

As for the performance of the Italian luxury goods sector in light of market turmoil, Trapani said: "The situation remains very volatile. From about six to eight months ago, we are registering high volatility, higher than usual."

Bulgari said in a statement shareholders had authorised it to buy 15.4 million euros worth of its own shares, at a price per share between five euros and 18 euros, for a period of 18 months.