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MILAN — Italian eyewear maker Safilo Group SpA returned to profit in the second quarter and nominated Robert Polet — the former chief executive officer of Gucci Group — as its new chairman.
This story first appeared in the August 3, 2011 issue of WWD. Subscribe Today.
However, the group said it remained “cautious” on its outlook for the full year due to “macroeconomic uncertainty, particularly in Europe and the U.S.”
Safilo, based in Padua, Italy, reported a net profit of 12.9 million euros, or $18.6 million, in the quarter ended June 30 compared with a net loss of 5 million euros, or $7.2 million, in the same period last year, due to strong sales gains in markets like Asia and Latin America. The continued decrease in net financial charges and an improved tax rate also contributed to boosting the bottom line.
During a conference call with analysts, Safilo ceo Roberto Vedovotto said that first half net profit of 31.3 million euros, or $45.1 million, was “the second best” first-half net profit result in the company’s history.
Regarding the appointment of Polet as group chairman, Vedovotto said the nomination — to be approved at the shareholders’ meeting scheduled for Oct. 5 — “is coherent with Safilo’s strategy to enrich its board of directors with professionals of undisputed experience and leadership in order to continue the successful journey started last year.” The board will be expanded to eight members from the current seven and Melchert Frans Groot, current Safilo chairman, will hand over his position and remain as nonexecutive chairman.
The Gucci Group, of which Polet was chairman and chief executive from 2004 until March, is one of Safilo’s key licensors in terms of sales.
In the three months, Safilo’s total revenues jumped more than 10 percent at constant exchange rates, to 303 million euros, or $436.3 million, thanks to “sound trading conditions” in the U.S. and “better performance” in Europe.
However, the group — which produces for major luxury brands including Alexander McQueen, Dior, Giorgio Armani, Gucci and Marc Jacobs — said the overall sales gains at current exchange rates was a more modest 2.8 percent as the dollar weakened against the euro.
Dollar amounts have been converted at average exchange for the periods to which they refer.
Safilo said that momentum in the U.S. market remained strong, driven by the healthy performance — in particular in the independent opticians channel — of the group’s top licensed brands as well as the continuing expansion of the house brand Carrera. The company remained mum about the renewal of the Armani license, which is due to expire at the end of 2012. Regarding the license, one of the group’s biggest in terms of sales, Vedovotto said, “We have started discussions but I don’t have any update,” he added. “We are not the only ones interested in the Armani license.”
However, the ceo confirmed that Safilo would continue allowing smaller, unprofitable licenses to expire going forward: “We will see more terminations of licenses, especially smaller ones which are not profitable.”
Vedovotto also said that Safilo’s much awaited new industrial plan will be presented on Sept. 29, in Paris.