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De Rigo Profits Drop As Safilo Surges 18%

MILAN — Italian eyewear maker De Rigo saw its first-half profit drop on weakness at its U.K. retail unit Dollond & Aitchison, but competitor Safilo fared better in terms of sales and profitability.<br><br>De Rigo’s net profit for the six...

MILAN — Italian eyewear maker De Rigo saw its first-half profit drop on weakness at its U.K. retail unit Dollond & Aitchison, but competitor Safilo fared better in terms of sales and profitability.

De Rigo’s net profit for the six months ended June 30 fell 31.4 percent to $9.2 million from $13.41 million in the comparable 2001 period, hurt mostly by poor results at D&A. Margins at the unit suffered as a result of weak eyewear sales in the U.K., as well as delays and logistical problems stemming from a reorganization of its lens production, De Rigo said. On an operating level, De Rigo’s first-half operating profit dropped 16.8 percent to $18.4 million from $22.1 million.

De Rigo saw its first-half sales rise 1.7 percent to $268.2 from $263.7 million. The company did not break down sales for each unit but it said retail sales at its Spanish chain General Optica rose 14.7 percent while D&A’s retail sales fell 3.9 percent.

Safilo saw its net profit for the same period rise 18 percent to $47.5 million from $40.2 million. But the firm, which recently became private by delisting its shares from the Milan stock exchange, did not explain the boost in profit. Safilo’s operating profit rose 10 percent to $85.5 million.

Safilo also outpaced De Rigo’s sales growth. Safilo saw its volume rise 5 percent to $499.5 million. It didn’t provide a detailed geographic breakdown, although the company said sales in France rose 13 percent.

De Rigo also said it suffered in part from weaker sales and margins at International Eyewear Distribution, its joint venture with Prada. Revenue dropped 25.4 percent to $14.7 million from $19.7 million as EID sold more eyewear to lower-priced independent retailers than in the past. Unit sales rose 11.1 percent.

The Prada venture’s profitability should improve as it cuts costs, De Rigo said. In the first half, EID’s operating profit came in “close to breakeven” compared with a profit of $782,848 in the first half of 2001.

In other news, Safilo has opened the doors of a showroom on Paris’s Champs Elysées. This store, Safilo’s second in France, will sell the various eyewear lines Safilo produces, including Gucci, Polo Ralph Lauren and Christian Dior.

Meanwhile, De Rigo said it has signed a licensing agreement to produce and distribute Furla eyewear. The company said it plans to launch the first Furla sunglass collection by the end of this year. Chief financial officer Maurizio Dessolis declined to specify the value of the contract but he said the license should generate “consistent volume” in sales.