Home Brands, David Beckham, Tommy Hilfiger Help Safilo but 2023 Sales Drop 4.9%

MILAN — It was a mixed bag of results for Safilo Group in 2023.

Preliminary sales in 2023 totaled 1.02 billion euros, down 4.9 percent compared with 1.07 billion euros in 2022. At constant exchange rates, revenues decreased 2.4 percent.

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The Italian eyewear company cited headwinds from the continuing weakness of the North American market, and a more than 60 percent drop in revenues recorded in the former GrandVision chains. Net of this last effect, the group’s organic sales increased by 1.6 percent, lifted in particular by its proprietary brands Carrera, Polaroid and Blenders. Smith also further grew in the direct-to-consumer channel.

Safilo’s owned brands have grown to represent around 44 percent of sales. The online channel accounted for 16 percent of the total thanks to Blenders and Smith’s DTC.

In the last quarter, sales stood at 238.7 million euros, marking the best performance of the year, equal to growth at constant exchange rates of 1.7 percent but showing a 2.7 percent decrease at current exchange rates. Safilo reported a return to growth in North America and Europe in that quarter.

On the licensed brands front, 2023 further confirmed Boss and Tommy Hilfiger’s collections as key, while among the most recent partnerships, Carolina Herrera, which joined Safilo’s portfolio in 2022, and David Beckham, a brand launched for the first time in eyewear in 2020 and already one of the group’s core brands, were singled out for their double-digit performances.

Safilo’s portfolio also includes licenses with brands ranging from Dsquared2, Etro and Isabel Marant, to Levi’s, Moschino and Stuart Weitzman, among others. As reported, in December the eyewear company interrupted the licensing agreement with Chiara Ferragni “following the violation of contractual commitments undertaken by the brand owner” in the wake of a controversy linked to a charity project she supported last year.

Sales in North America were down 9.2 percent to 452 million euros, accounting for 44.1 percent of the total. The market improved in the last quarter of 2023, registering sales of 111 million euros, down 2.9 percent, thanks to a greater stability of the eyewear segment in the traditional channels of independent opticians and chains, and the growth of Blenders and Smith in their DTC channels.

In the 12 months, revenues in Europe decreased 3.1 percent to 411.8 million euros, representing 40.2 percent of the total. At constant exchange, sales inched down 0.6 percent, almost completely recovering the sharp decline in business in the former GrandVision chains.

Sales in Asia Pacific were up 3.9 percent to 59.9 million euros, while they rose 3.8 percent in the Rest of the World area to 100.1 million euros.

On a preliminary basis, adjusted gross margin reached about 59 percent of sales in 2023, compared with a margin of 55.5 percent in 2022.

At the adjusted earnings before interest, taxes, depreciation and amortization level, the year closed with a margin of around 9 percent. This excludes non-recurring costs expected for the year of around 29 million euros, mainly due to the transfer of the Longarone plant, and to the termination of activities related to exiting licensed brands. Safilo in October finalized the sale of its storied manufacturing complex in the Veneto region, one of the country’s key eyewear manufacturing districts, to Thélios, the LVMH Moët Hennessy Louis Vuitton-owned eyewear manufacturer, and Innovatek, owned by entrepreneur Carlo Fulchir.

As of Dec. 31, Safilo’s net debt fell to around 83 million euros from 113.4 million euros at the end of December 2022.

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