Moodie Davitt snapshot: Safilo Group preliminary 2017 results
– Full-year sales -16.4% year-on-year
– Loss of Gucci licence drives fall
– Dior collections down
– Total sales = €1.04 billion
– Europe sales -12.7%
– Asia Pacific sales -43.9%
Source: The Moodie Davitt Report
Safilo Group’s preliminary full-year 2017 sales decreased -16.4% to €1.04 billion, compared with €1.25 billion in 2016.
The company said the decline was due to the loss of the Gucci licence, which has become a supply agreement, and the implementation of the new Order-to-Cash IT system in the Padua warehouse.
The Gucci licence ended in December 2016, two years earlier than planned, following parent company Kering’s decision in 2014 to develop eyewear in-house, establishing Kering Eyewear.
Dior collections experienced a decrease after several years of very strong growth. All other licences, as well as the Own Core Brands, grew single digits.
Sales of the ‘Going Forward’ brand portfolio fell by -3.9% at constant exchange rates.
In the 12 months ended 31 December, sales in Europe dropped -12.7% to €469.3 million, representing 44.8% of the total.
Asia Pacific posted the biggest decline (-43.9%), while North America (-17.1%) and Rest of the World (-0.2%) also saw a dip in sales.
Safilo said that it is expecting profitability for the year “to be impacted by the somewhat larger decline in sales than planned in the fourth quarter leading to an adjusted preliminary full year EBITDA of €38 to €40 million”.
In the fourth quarter of 2017, Safilo’s preliminary total net sales equalled €249.2 million at constant exchange rates, down €53 million compared to 2016.
The net effect of exiting the Gucci licence and entering the supply agreement accounted for €44 million of the decrease, while net sales of the ‘Going Forward’ brand portfolio declined by -3.7% at constant currency.
Click here to read an interview with Safilo Group Head of Travel Retail Frederic Laffort.