Nov 14, 2013
Safilo says "on track" to offset loss of Armani licence
Nov 14, 2013
MILAN, Italy - Italian eyewear group Safilo is "about on track" to offset the loss of a licence to make glasses for Italian fashion house Armani, its main objective for 2013, the company's new chief executive said on Wednesday. Safilo lost the Armani deal to market leader Luxottica at the beginning of this year and CEO Luisa Delgado said it is now focusing on its other licences and house brands.
The maker of Gucci- and Dior-branded sunglasses and prescription frames posted a third-quarter net profit of 1.7 million euros ($2.28 million) on Wednesday.
Safilo gave no forecasts of its own for the full year, but a mean estimate from analysts polled by Thomson Reuters points to 2013 net profit of 32.3 million euros for the company.
Delgado did not say exactly how much the loss of the Armani licence had cost Safilo, but Luxottica Chief Executive Andrea Guerra told Reuters in July the licence contributed around 3.5 percent of its second-quarter wholesale revenue - translating to roughly 30 million euros..
Safilo said this had been the first positive third quarter it recorded since it agreed a debt restructuring in 2009 and was rescued by Dutch investment company Hal Holding.
As well as investing in its portfolio of brand licences, Safilo is now focusing on the eyewear names its owns, which include Polaroid and Carrera.
"The unique equity potential of those brands is not leveraged right now," Delgado, who took over from former chief Roberto Vedovotto a month ago, said on a conference call.
"I think it would be fair to say that we would see over time potential to double our business in our house brands. The question of course is how fast and what it takes to do that."
Safilo said Europe, where it makes around 40 percent of its sales, was the only market where sales grew in the third quarter, by 6.3 percent at current exchange rates, although its home market of Italy remained weak.
"Outside Italy - even in Spain and Portugal - we are seeing some signs of recovery," chief financial officer Vincenzo Giannelli said.
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