MILAN — Safilo Group SpA on Monday appointed a new chairman as the eyewear firm reported a net loss of 351.4 million euros, or $488.4 million, in 2009, compared with a loss of 23.2 million euros, or $32.2 million, the year before.
The Italian eyewear maker said the bottom line was hit by nonrecurring writedowns and nonmonetary items totaling 318 million euros, or $442 million.Net losses from ordinary activities totaled 33.7 million euros, or $46.8 million, compared with a net profit of 14.6 million euros, or $21.4 million, in 2008.
Safilo shareholders appointed the group’s new board, which will be in office until Dec. 31, 2012, voting Melchert Frans Groot, from new majority shareholder HAL Holding, as the chairman.
Roberto Vedovotto was confirmed chief executive officer, and former chairman Vittorio Tabacchi, who resigned last month, was nominated honorary chairman. Tabacchi is the son of Safilo founder Guglielmo Tabacchi. Giovanni Ciserani, Jeffrey A. Cole, Marco Jesi and Eugenio Razelli were the other board members elected from the majority list. From the minority list presented by shareholder Only 3T SpA, Massimiliano Tabacchi, son of Vittorio, was elected to the board.
In 2009, sales dropped 11.9 percent to 1.01 billion euros, or $1.4 billion, hurt by “the weakness of international markets” and the softness in the high-end sunglasses and prescription frames business. The fourth quarter was particularly tough, impacted by the devaluation of the U.S. dollar and some Asian currencies against the euro. In the fourth quarter, sales fell 16.2 percent to 236.5 million euros, or $347.6 million.
However, throughout 2009, the U.S. was the “area with the greatest capacity for resilience due, above all, to the satisfactory business performance reported by independent opticians,” said the company.
Safilo also said it “was impacted by the even greater softness in purchases of high-end sunglasses and prescription frames,” its core business. Safilo produces eyewear collections for Giorgio Armani, Dior, Gucci, Marc Jacobs, Valentino and others. In October, Safilo signed an agreement with its new main shareholder, Amsterdam-based retailer HAL Holding NV, to initiate a long-term recapitalization plan and thus escaped bankruptcy.
“We went through a series of material changes last year, but we believe we have laid down the basis for the future of Safilo, supported in our journey by a solid and experienced partner with a strong knowledge and expertise in our sector,” said Vedovotto.
In the first few months of 2010, the company noted signs of a recovery in Asia, excluding Japan, and an ongoing improvement in the U.S., while “demand remains uncertain and volatile in Europe, where purchases of products with more moderate price points remain predominant.”
Given current market conditions, the company expects to register flat sales in the first quarter, compared with the same period last year.
In 2009, sales in the U.S. dropped 5.4 percent. A good Christmas season helped lift the performance at department stores and large retail chains in the fourth quarter. Europe continued to suffer last year, showing an 18.2 percent drop, impacted by falling average sales prices that grew steeper over the second half of the year, especially in the sunglasses segment. On a positive note, Safilo’s own brand, Carrera, showed 20 percent growth in Europe over the year.
Sales in Asia fell 11.5 percent, with Hong Kong and South Korea showing ongoing growth. Conversely, sales in Japan continued to fall.
Dollar figures are converted at average exchange rates for the periods to which they refer.
Net debt totaled 588 million euros, or $817.3 million, at the end of the year, compared with 570 million euros, or $837.9 million, at the end of the previous year.
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