MILAN — Italian eyewear company Safilo said Monday it will rationalize its production facilities in order to streamline the organization, achieve greater efficiencies and improve “its industrial profitability in the mid to long term.”
This story first appeared in the March 17, 2009 issue of WWD. Subscribe Today.
Safilo — which holds the eyewear licenses for Giorgio Armani, Dior, Gucci, Valentino and other major brands — said that, in line with its plan, it will downsize production at its factories in Precenicco and Martignacco, Italy, and in Ormoz, Slovenia. Safilo will hold talks with union representatives at the plants regarding the downsizing. The company did not reveal whether there would be layoffs.
Safilo also said it had granted chief executive officer Roberto Vedovotto “the powers to seek the widest strategic options aimed at strengthening the company’s capital structure.” The company’s majority shareholder, 3T SpA, said earlier this year it had contacted a few potential partners to strengthen and develop the group. According to sources, talks have since stalled, as the Tabacchi family, which owns 39.8 percent of Safilo through Only 3T, did not wish to relinquish a controlling interest in the company. Another alternative may be to delist the company from the Milan Bourse.
On Monday, Safilo also confirmed net profits of 14.6 million euros, or $21.5 million, in 2008, compared with profits of 51 million euros, or $73.9 million, in 2007. Sales in 2008 fell 3.6 percent to 1.15 billion euros, or $1.69 billion, although at constant exchange rates they were flat. Dollar figures are converted at average exchange rates for the periods to which they refer.
Safilo said the high-end sunglasses market was particularly hard-hit by the economic downturn in the fourth quarter of 2008, and that “the first months of 2009 have also been characterized by a difficult performance in all of the group’s main markets.” On an upbeat note, however, Safilo’s Carrera brand “has continued to register significant growth rates.” The company attributed Carrera’s performance to its products and its price positioning.