Safilo Group Renews CEO Contract

MILAN — Safilo Group recovered many of the gross sales decline within the former GrandVision chains within the first 9 months of the yr however tendencies in North America remained gentle at the same time as rising markets continued to develop.

Chief government officer Angelo Trocchia mentioned throughout a name with analysts on Friday night on the finish of buying and selling that Safilo had seen a return to progress of its sports activities enterprise in North America, which confirmed a persistent weak spot within the eyewear market, significantly within the up to date section.

Within the 9 months ended Sept. 30, Safilo revenues had been down 5.6 % to 785.1 million euros, in contrast with 831.3 million euros in the identical interval final yr. Trocchia pointed to the stable efficiency of dwelling manufacturers, particularly Smith, Carrera and Polaroid, and among the many licensed manufacturers, Carolina Herrera, Boss, David Beckham and Tommy Hilfiger. 

Throughout the interval, on-line channels represented 14.4 % of gross sales, marked by a continued very constructive efficiency of the direct-to-consumer gross sales of sports activities merchandise, contrasting with the nonetheless weak efficiency of web pure gamers. 

Within the third quarter, group gross sales declined 9.8 % to 235 million euros.

“As anticipated, the decline of enterprise within the former GrandVision chains continued to weigh on Europe, internet of which gross sales within the space had been barely up in comparison with the identical quarter final yr, a interval that had been marked by the power of the solar season,” mentioned Trocchia, whose contract was renewed for an additional three years, it was reported on Friday.

Trocchia additionally expressed satisfaction within the settlement signed in September with Stuart Weitzman for a multiyear world licensing settlement for eyewear, which might be unveiled in 2024 for fall.

On the similar time, he additionally spoke with delight of the settlement inked in September with Amazon to supply the brand new Carrera Sensible Glasses with Alexa.

“This is a crucial first step into the longer term with an progressive strategy,” mentioned Trocchia. He shined a light-weight on the truth that “Amazon has chosen Safilo to launch this product, placing know-how and Italian design collectively. Will this transformation gross sales? Revolutionize [business] in a single or two years? No, nevertheless it’s essential; in 5 to 6 years, eyewear might be completely different from at the moment and we’re getting on the practice of this enterprise mannequin, which is able to assist our picture and reinforce the model.”

Within the 9 months, Safilo’s adjusted gross revenue amounted to 459.1 million euros, basically flat in comparison with the identical interval final yr.

Adjusted earnings earlier than curiosity, taxes, depreciation and amortization totaled 75.4 million, down 11.5 % from 85.3 million euros in the identical interval final yr.

Safilo’s financial efficiency was additionally impacted by non-recurring prices equal to eight.2 million euros on the gross revenue degree and 17.4 million euros on the EBITDA degree, primarily associated to the switch of the Longarone plant. 

As reported final Tuesday, Safilo finalized the sale of its storied manufacturing complicated in Longarone, within the Veneto area, one of many nation’s key eyewear manufacturing districts, to Thélios, the LVMH Moët Hennessy Louis Vuitton-owned eyewear producer, and Innovatek, owned by entrepreneur Carlo Fulchir.

Within the 9 months 2023, Safilo’s free money circulate stood at 15.8 million euros, in comparison with an absorption of 17.8 million euros final yr.

“On this quarter, we achieved one other important growth of the gross margin, whereas the working efficiency was quickly restricted by the upper incidence of working prices, reflecting, particularly, the continuation of our IT investments to speed up the group’s digital transformation and advertising actions to help the longer term growth of our dwelling manufacturers,” mentioned Trocchia.

Nonetheless, “even in a weak and unsure market setting, our actions proceed to deal with the implementation of these initiatives that can enable us to realize our medium-term targets,” he continued. “It was significantly vital for us to maintain the constructive money era initiated within the first half of the yr, a objective that we achieved because of good working capital administration.”

Requested about Safilo’s efficiency in October, Trocchia mentioned it was “a small month” for the group, that continued to indicate softness in wholesale within the U.S., with Europe “nonetheless barely constructive” and Asia rising. “November is essential to know the direct-to-consumer enterprise for Blenders and Smith,” he mentioned.

Within the third quarter, gross sales in North America fell 12.2 % to 109.6 million euros, closely impacted by the strengthening of the euro in opposition to the greenback. Within the 9 months, Safilo’s gross sales in North America had been down 11 % to 341.1 million euros.

The wholesale channel “stays nervous in North America; they’re very acutely aware of money and prudent now,” mentioned Trocchia.

In Europe within the third quarter gross sales had been down 10.7 % to 85.4 million euros. Chief monetary officer Michele Melotti spoke of a normalization of tendencies in markets resembling Italy, France and Spain, which, greater than others, benefited from a powerful solar season final yr, whereas the German market remained negatively affected by the weak spot of the IPP (web pure gamers) channel.

Within the 9 months, Safilo’s gross sales in Europe had been down 3.5 % to 321.1 million euros. Within the interval, gross sales in Europe, internet of the enterprise within the former GrandVision chains, grew by about 7 % at fixed change charges. 

In Asia and Pacific, gross sales within the third quarter amounted to fifteen.2 million euros, down 5.9 % pushed by the constructive progress of the enterprise in China and different key markets within the area, and by the sports activities enterprise, which, with Smith, is now considered one of Safilo’s fundamental progress drivers within the space. 

Within the 9 months, gross sales in Asia and Pacific had been up 6 % to 43.8 million euros.

In the remainder of the world, gross sales within the third quarter reached 24.8 million euros, up 3.9 %, primarily led by the additional growth of Carrera in India and the Center East, whereas enterprise tendencies in Latin America was constructive in Mexico, however softer in Brazil. Within the 9 months, gross sales reached 79.2 million euros, up 7.3 %.

Requested about market rumors surrounding a possible sale of Marcolin by Pai Companions and whether or not Safilo might be serious about an acquisition, Trocchia demurred, saying the “asset has worth, we are going to see the developments over the following few months.”

The manager touted Blenders’ partnerships with Coach Prime and with System 1, with the Pink Bull group, that are increasing the shopper base of the eyewear model and had been surprisingly efficient by way of model consciousness, he admitted. “This isn’t a one-off and we’re in open discussions with Coach Prime to make [the deal] even greater,” mentioned Trocchia.

As of Sept. 30, internet debt amounted to 96 million euros in contrast with 113.4 million euros on the finish of 2022.