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* Seeks to spice up personal manufacturers, considers acquisitions
* Could lose 340 mln euros in gross sales if LVMH takes eyewear in home
* Wants to remain impartial after Luxottica-Essilor tie-up
By Valentina Za and Claudia Cristoferi
MILAN, Jan 27 Italian eyewear group Safilo could make up for the potential lack of design-to-distribution offers with French luxurious group LVMH with new licences and by increasing its personal manufacturers, its chief government mentioned on Friday.
Shares in Safilo have been hit final week by a report that LVMH may purchase a stake in spectacles maker Marcolin and grant it licences presently held by Safilo and value 340 million euros ($363 million) of its gross sales.
Safilo not too long ago renewed the important thing Dior licence with LVMH till 2020 however mentioned it could lose Celine, one other model of the French group, after this 12 months. Licences for Givenchy, Fendi and Marc Jacobs will expire between 2021 and 2024.
“Safilo can get reorganised to not just survive but flourish even without LVMH,” CEO Luisa Delgado advised Reuters in an interview.
“Our heart is in our core brands and in being good licensing partners, nimble and easy going. We receive two or three proposals a week,” she mentioned, talking on the group’s Milanese showroom.
The eyewear business goes by a serious shake-up with prime spectacles maker Luxottica set to merge with the world’s largest lens producer Essilor in a 46 billion euro deal introduced this month.
The long-mooted tie-up follows Kering’s radical transfer in 2014 to deliver its eyewear enterprise in-house to spice up revenue margins.
The French group arrange Kering Eyewear in Padua, Safilo’s hometown, and turned a 350 million euro Gucci licence with Safilo right into a four-year manufacturing deal ranging from Jan. 1, 2017.
But Delgado shrugged off any strain to merge.
“We’re an attractive target … but we want to remain independent, Italian and listed in Milan,” she mentioned.
Delgado mentioned bringing collectively lenses and frames made sense nevertheless it could possibly be achieved by partnerships. “You don’t need a merger,” she mentioned.
“We’ve lost licences in the past and we’ve filled the hole in our sales.”
LVMH CEO Bernard Arnault mentioned on Thursday the group would unveil its new eyewear technique later this 12 months. He declined to touch upon the hypothesis about Marcolin.
Founded in 1934, Safilo is the world’s second largest eyewear producer with 1.3 billion euros ($1.4 billion) annual gross sales in 2015 in contrast with Luxottica’s 9 billion euros.
Delgado, who arrived at Safilo in 2013 when former CEO Roberto Vedovotto moved to Kering Eyewear, goals to spice up the share of gross sales from proprietary manufacturers to 40 p.c below a plan to 2020 unveiled in March 2015.
She mentioned whipping into form the group’s 5 manufacturers Safilo, Polaroid, Carrera, Smith and Oxydo had taken longer than initially envisaged.
“Growth at our own brands is not yet visible … but the foundations are now in place, results will follow. The stars are coming together,” she mentioned.
Delgado mentioned Safilo may increase its model portfolio with an acquisition. “We’re always on the lookout, we’re buyers not sellers,” she mentioned.
Analysts say U.S. eyewear model Maui Jim, Denmark’s Lindberg and Austria’s Silhouette could possibly be engaging targets.
Safilo had 72 million euros in liquidity and web debt of 103 million euros at end-June. Next 12 months, the group is ready to obtain a 3rd and ultimate 30 million euro instalment in compensation agreed with Kering for ending its Gucci licence with Safilo.
Safilo final acquired a model in 2012 shopping for Polaroid for $88 million because of a 44 million euro capital injection by its prime shareholder, Dutch funding fund HAL Holding.
HAL, which took management of Safilo from Italy’s Tabacchi household again in 2009, stays a long-term investor within the group, Delgado mentioned. ($1 = 0.9362 euros) (Reporting by Valentina Za and Claudia Cristoferi; enhancing by Francesca Landini and Jane Merriman)