Update on Safilo................

**Chris Ryser** · 12-03-2009, 08:47 AM

STOCKS NEWS EUROPE-Safilo up ahead of bond offer deadline

Mon Nov 30, 2009 10:56am GMT

Italian eyewear maker Safilo SpA (SFLG.MI) extends Friday's gains, rising more than 4 percent to 0.6045 euro, ahead of a 1600 GMT deadline for an offer for its bond, key to the loss-making company's recapitalisation plan.
Shareholder Hal Holding said last week it had pushed back until Monday a deadline to complete a cash tender offer for the 195 million euros bond expiring in 2013.

It is seeking at least 60 percent acceptance for the offer but by Thursday afternoon only 42.45 percent had been tendered.

Without citing sources, Saturday's La Repubblica newspaper said Hal would be content with getting 50.1 percent adherence.

"The market is betting on Hal getting the 60 percent acceptance or for the threshold being lowered to 50.1 percent," a trader says.

Il Sole 24 Ore said on Sunday there was market speculation Hal had reached an agreement with U.S. bondholders.

Reuters Messaging rm://cristina.carlevaro.reuters.com@reuters.net

http://uk.reuters.com/article/idUKGEE5AT14E20091130

**Chris Ryser** · 12-09-2009, 04:02 AM

Milan today.....

SAFILO (SFLG.MI) Bourse regulator Consob granted Hal Holding and Only 3T anexemption from making a mandatory tender offer, a condition fora rescue plan for the eyewear maker.http://uk.reuters.com/article/idUKGE...?symbol=LUX.MI

**rdcoach5** · 12-09-2009, 08:24 AM

Chris, how did this happen to a huge frame company to start with? As far as I can tell, they are still selling tons of frames.

**Fezz** · 12-09-2009, 08:31 AM

Originally Posted by rdcoach5

Chris, how did this happen to a huge frame company to start with? As far as I can tell, they are still selling tons of frames.

It happened, in part, because some of us finally came to our senses and stopped purchasing from them!

**Johns** · 12-09-2009, 08:40 AM

Originally Posted by rdcoach5

As far as I can tell, they are still selling tons of frames.

That's the perception, but if it were true, investors would be able to speak about them without using the term "rescue".

Sure, reps will tell you how good the company is doing, and you'll see tons of their product on the shelves of one of the most impressive optical boutiques in the country...WalMart. Well guess what? Selling to WM is going to move a lot of product, but won't move a whole lot down to your bottom line.

**For-Life** · 12-09-2009, 08:48 AM

Originally Posted by rdcoach5

Chris, how did this happen to a huge frame company to start with? As far as I can tell, they are still selling tons of frames.

Revenue does not = profit. Size does not mean you are doing well. I have not studied the Safilo situation, but typically it is the growth of expenses (especially fixed ones) that either happens when someone tries to grow and it does not work, or they lose market share and cannot come down.

I called this for a while. The frame situation is super competitive, and the largest ones are becoming myopic and hiding behind brands. I said that one major company was going to fail. You have Safilo, Luxottica and Marchon fighting for brand names, but being only able to offer the name. No name, smaller companies are coming out with the styles, the colour, the sizes, and all for a much cheaper price. So you have many of the independent stores deciding to carry something else. The store that I used to work at and still consult for is the most fashionable store in town and has good volume, yet carries no Safilo, no Luxottica, and no Marchon, and no major brand name. We bought based on look, quality, and value. Why buy a frame for 3x as much because it has a brand?

So as these retailers began to all shift, the big 3 began to rely more and more on the chains. Well when one of your competitors owns all of the chains and that is a major source of your revenue, what do you do?

People always assume that the bigger they are, the more logical they are. Not always true. In many ways, dang wrong. When you get big, you chase after the lone dollar and do not look at the big picture. This is what is happening with Essilor right now as it is looking at the online markets. Public companies are driven by profts. This is what investors see and this is what they jump at. When investors are looking for consistent 7% profit growth, it is somewhat unrealistic and you make stupid decisions, because you as the CEO want your $1 million bonus and will get fired if you only produce a 3% increase.

**YrahG** · 12-09-2009, 08:48 AM

If I had to give a reason to why I think this happened.

All their frames started to look alike (even between designer and cre lines)
Lack of color in all their lines (only so much brown, black, and toirtoise a shop can carry)
Quality is inconsistent (many frames even in the reps bags seem to have chipped paint, coorked embelishments in the temples, and lack of attention to the overall manufacture)
Price $$$$ (over the years the price of the product coming through them has gone threw the roof, their is only so much a patient is willing to pay for certain products and if that leaves nothing in profit for an optical shop then they have to reconsider the product all together)
Overexposure (this I think is their biggest problem, any shop can carry any of their lines, their is no level of exclusivity even with their luxury brands every shop in town can carry them and often does)

Those would be my reasons for not using many of their brands, I just can't make enough money on them, and many of their brands can be shopped extensively in my area. Even to this day with the state of their company I still get treated like I'm small peanuts which I have no doubt I am in the scheme of things, but my other vendors treat me better than that.

I would personally think that the company can consolidate their reps, and take a more personal approach treat all their customers like they're big fish and their customers will in turn treat them well. It could also help to not disco designs every month I like being able to have a new frame on my boards fro more than a month without worring about it being disco'd. Give it at least a year and a half before it's disco'd that way I have a chance of sellign a few and getting replacement parts.

**Fezz** · 12-09-2009, 11:32 AM

I did see on the Eyefinity site that they are going Gaga!!!

Maybe that is the whole problem?

;):cheers::cheers::cheers::D

**For-Life** · 12-09-2009, 12:53 PM

Originally Posted by Fezz

I did see on the Eyefinity site that they are going Gaga!!!

Maybe that is the whole problem?

;):cheers::cheers::cheers::D

Lady Gaga?

I just had my Marketing student's do their presentation. A group of 3 guys did a faux sales pitch for Lady Gaga clothing to H&M. It is great to see 3 guys have the guts to do that.

**DragonLensmanWV** · 12-09-2009, 01:34 PM

Originally Posted by For-Life

Lady Gaga?

I just had my Marketing student's do their presentation. A group of 3 guys did a faux sales pitch for Lady Gaga clothing to H&M. It is great to see 3 guys have the guts to do that.

Hopefully they're not trying to sell her stage costumes.:D

**drk** · 12-09-2009, 02:36 PM

I think the core of the problem is that the market evolved.

Remember that an industry has three phases:
http://www.wave4ss.com/threephasesofgrowth/ (Don't read the whole thing.)

We got to phase three, and Safilo was using leverage to stay competitive (instead of being truly competitive).

It's happening all over the globe.

**Chris Ryser** · 12-09-2009, 02:49 PM

BRUSSELS, Dec 9 (Reuters) - The following are planned mergers under review by the European Commission and a brief guide to the EU merger process

-- Netherlands Antilles investment firm Hal Investments to acquire control of Italian eyewear maker Safilo Group S.p.A (SFLG.MI) (notified Nov. 9/deadline Dec. 14)