Italian eyewear group Safilo experienced an increase in sales in 2019, reaching €939 million. This growth was primarily driven by strong performance in the wholesale channel and the Asia-Pacific region. In comparison, the company reported a revenue growth of 3.1% in 2018, totaling €910.7 million. It’s notable that these figures exclude the retail business of US chain Solstice, which was sold to American eyewear company Fairway at the end of 2019.
One of the standout performers for Safilo was the Asia-Pacific region, which saw a significant revenue growth of 23.1% in 2019, amounting to €78 million. This region represented an 8.3% share of Safilo’s consolidated revenue. On the other hand, Europe, which contributes to nearly half of the company’s revenue, experienced a decrease of 0.7% in sales. In fact, it was the worst-performing region in the fourth quarter, with a substantial decrease of 11.2% at constant rates.
Safilo’s wholesale revenue also witnessed an increase, in line with the company’s 2019 forecast. The wholesale channel saw a growth of 5.2% at current exchange rates and 2.8% at constant rates. This growth was fueled by Safilo’s own brands such as Carrera, Polaroid, and Smith, which together experienced a revenue increase of 5.7% at constant exchange rates, as well as licensed brands. However, it’s important to note that the revenue generated from the renewal of the supply deal with Kering for Gucci eyewear, until the end of 2023, was not included in the wholesale channel’s results.
In the fourth quarter of 2019, Safilo’s net sales amounted to €230.4 million, but experienced a decrease of 2.8% at current exchange rates and 4.3% at constant rates. This decline was mainly due to the expected decrease in business related to the supply agreement with Kering in Europe.
To counter the loss of the LVMH licenses, Safilo announced a restructuring plan at the end of last year. This plan is estimated to have an impact of €200 million and includes measures such as cutting 700 jobs in the Friuli and Veneto regions in Italy, enhancing digital strategies, and focusing on mergers and acquisitions. However, these changes have faced resistance from unions, who are prepared to fight against the restructuring plan. Further talks between Safilo and the unions are scheduled for February 5.
Despite challenges in the European market and the loss of key licenses, Safilo has demonstrated its ability to adapt to changing market dynamics and focus on growth opportunities. The company remains committed to its restructuring plan and actively seeks new avenues for expansion.