Mar 16, 2015
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Safilo expecting revenue of 1.7 billion euros by 2020

Mar 16, 2015

The Italian eyewear specialist, the reference shareholder of which is Dutch retail investment group Hal, is going to focus more on its own brands to achieve a "more sustainable" balance with its brands under license. That will be the main focus, but the group will also undergo a structural and cultural reorganisation, that will carry the group in the next six years, according to the ambitious strategic plan for 2020, presented on Monday to the financial community.

With this new strategic plan, the second biggest eyewear manufacturer in the world is expecting revenue of 1.7 billion euros by 2020 following a growth plan of 6% (+40% between 2014 and 2020), while the gross operating income, which was 118.4 million euros, should double for the same period between 2014 and 2020. The cash flow available for 2015-2020 is expected to be between 350 and 400 million euros.

Polaroid, one of Safilo's own brands

Present in 130 countries with a production of 35 million pairs of glasses and 1.2 billion euros in revenue in 2014, Safilo now wants to focus on its own brands after being burned by the loss of its Armani license in 2013 and Kering's recent decision to take back direct control of the design and distribution of its glasses.
Consequences for the Italian group: the loss of major licenses like Gucci, which it has held for twenty years and which will come to an end two years ahead of schedule, at the end of 2016, and other brands from Kering, such as Bottega Veneta, Saint Laurent and Alexander McQueen.

Safilo is thus going to be focusing on its own brands. Especially Carrera, which was recently repositioned; Smith, still small because until now it has been concentrated in the US; and above all Polaroid, a label acquired in 2012, the sales of which jumped 20% for two consecutive years, which is destined to become "the group's major brand, present everywhere." The eyewear maker also holds the brands Safilo and Oxydo.
By 2020, the group's own brands should generate 40% of the revenue compared to 25% in 2014. "We are counting on doubling their revenue within six years. This new path started last year and is already revealing good results," explained Safilo's CEO, Luisa Delgado, to financial analysts.
The group will invest 500 million euros to support this new policy. "The licenses will continue to develop, like in the past, but our own brands will accelerate. They were a bit looked over until now. We want to give them the opportunity to show their potential. In the long term, a brand name makes it possible to generate bigger margins compared to a brand under license," concluded Luisa Delgado.
In this context, the group has also just launched Safilo Kids, a line of eyewear designed for the specific needs of children 0 to 8 years old.

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