LUXOTTICA REPORTEDLY WANTS TO SELL PARTS OF WOMEN’S UNIT
Byline: David Moin / Sharon Edelson
NEW YORK — As cutbacks rock Casual Corner this week, reports have surfaced that the parent company, Luxottica, is seeking to sell off some other parts of its women’s specialty group.
Claudio Del Vecchio, president of the group, denied the report Thursday, stating, “We’re not trying to sell any division.” But he added, “If somebody wants to come in and is interested in a division, they should give me a call because I’m always available to talk. Anything is for sale for the right amount of money. I’m involved with Luxottica, and for the right price, Luxottica is for sale.
“We are very confident that we are turning around and can continue to turn around this company,” Del Vecchio added. “Our intention is not to fix the company to sell it; it’s to fix the company to enjoy the results of the turnaround. There’s always a price for everything, but we’re not trying to get rid of any one of the divisions. We’re trying to fix every one of the divisions.”
According to a source, Del Vecchio has been seeking a buyer for the August Max and outlet divisions. “They’re not being openly marketed,” said the source. “The problem is no one wants to assume the leases.”
August Max, a 75-unit chain selling women’s large sizes, reportedly does $30 million to $40 million in yearly volume. The outlet division has about 100 units reportedly doing roughly $80 million in total sales.
There has long been speculation that Del Vecchio would sell Casual Corner, the biggest piece of Luxottica’s women’s businesses, if he could. With retailing tough, particularly in the overstored specialty sector, it would be difficult to find a buyer for the huge, with 550 stores doing a combined $800 million in sales last year. Luxottica also operates Petite Sophisticates.
Instead, Del Vecchio has been boldly trying to revive Casual Corner. His actions of the past year include investing in a new distribution center in Enfield, Conn., new systems and enhanced training for the chain’s 12,000 associates.
Del Vecchio stepped up design activities in New York in the past year, then conceded that the company overbuilt the office.
As reported, there were massive cutbacks in the New York office this week. Sources expect Del Vecchio to soon dramatically cut the merchandising staff in Enfield, Conn., where the women’s group is based. “There’s always a possibility, but it’s not going to happen today, at least,” Del Vecchio said.
The total women’s business has been losing at least $150 million annually for the past few years, according to reports. About 10 percent of the leases come due each year, enabling Luxottica to slowly get out of weak sites. Generally, store leases run for 10 years.