Safilo

**Bradley** · 10-03-2005, 10:12 AM

Just heard from a frame rep that Safilo is planning to enter the retail market in the US sometime within the next year and in a big way (thousands of stores). Can anyone substiantiate this factually?

**ziggy** · 10-03-2005, 11:35 AM

From what I understand they will do something in the retail sector, but not thousands of stores. Those pockets arent that deep. Safilo took a hugh $$$ hit when they made the decision to pull out of Pearle (after the Lux buy out).

**impact500** · 10-03-2005, 12:16 PM

Safilo currently has a very high debt level. Therefore I suspect a major retail move is currently impractical.

They have filed the initial paperwork for an IPO which if successful would enable some new initiatives. The goal is to raise between 700 million and 1 billion euro. It is unclear how much of the proceeds would go to (A) Credit Suisse First Boston - minority shareholder who is reported to be cashing out a portion of their equity via the IPO, (B) to pay off debt (825 million euro as of the end of June), and how much for new efforts. The first two may constrain the third.

Expansion of Solstice, their sunglass retail chain might be more likely than focusing on Rx retail.

**Fezz** · 10-03-2005, 12:59 PM

I wish they would fix their da*n backorder issue! I have had more spring hinges from them break in the last 2 months then I have had in the last 2 years! Call to reorder=BACKORDER GALORE!!! UGH!

Fezz
:cheers:

**For-Life** · 10-03-2005, 01:08 PM

So Safilo has a lot of debt (which they hope to solve by becoming public, but who knows), has backorder problems (probably due to the debt) and want to go retail and infuriate its retailers.

Yep that sounds like a plan.

**Spexvet** · 10-03-2005, 01:12 PM

Originally Posted by Bradley

Just heard from a frame rep that Safilo is planning to enter the retail market in the US sometime within the next year and in a big way (thousands of stores). Can anyone substiantiate this factually?

Did you hear this from your Luxottica rep?

**PAkev** · 10-03-2005, 02:37 PM

Originally Posted by For-Life

So Safilo has a lot of debt (which they hope to solve by becoming public, but who knows), has backorder problems (probably due to the debt) and want to go retail and infuriate its retailers.

Yep that sounds like a plan.

Hmmmm...

Perhaps this explains why I've had a Christian Dior 3553 backorderd frame for over a month and a half now.

The rep tells me that due to an increase in fuel prices their shipping costs have increased and therefore are receiving fewer and more consolidated shipments in order to refrain from raising their cost to retailers. Sounded fishy to me then and even more so now. If there is indeed a debt crisis situation with Safilo, it now makes sense they are being "Cut Off" from their suppliers.

**drk** · 10-03-2005, 02:40 PM

Which has worse backorders: Safilo, Marchon, or Luxottica? I'd bet it's a draw. Seems like it has to do with the "China Syndrome", but that's just a guess.

**aaron** · 10-03-2005, 05:57 PM

I will preface this statement by saying that while I am a frame sales rep, I have no agenda in this post.

So being part of a frame company that does so much manufacturing in the industry has taught me a little bit about the other side. Safilo and Lux both operate their own factories. They may use some other "specialty" factories for either extreme high or low end product, but for the most part; if it says made in italy...they made it. What can cause a backorder issue also is if the "stock" or material by which a frame is constructed is not available from whoever supplies this particular item.

I just ran into an issue with a frame that I sell very well being discontinued because of a particular zyl stock being unavailable for so long that by the time we fill the backorder on the actuall frame, people won't want it any more and most likely will exchange it.

Safilo has owned and operated retail sun stores for quite a while but have recently expanded. (3 new in my territory in the past year) But Safilo is usually fairly responsable in its placement and is usually in high end malls competing with the sunglass huts and oakley owned retail sun islands more than the independants. Plus, remember that the selection in those stores is limited to just a couple of lines outside of Safilo's cannon of brands.

Marchon recently built its own factory in china and there are probably growing pains with that. But marchon is a company that is here to stay so I am sure they will catch up.

Hey, charmant isn't exactly known for NOT having a backorder problem.

aaron

**Mikef** · 10-03-2005, 06:45 PM

In the next 5 years or so most all frame compaines will be doing some kind of retail.

**LENNY** · 10-03-2005, 11:04 PM

Good luck!

**For-Life** · 10-04-2005, 08:02 AM

Originally Posted by Mikef

In the next 5 years or so most all frame compaines will be doing some kind of retail.

I was actually reading an article about Sony in the exact same situation. They have forced its retailers to advertise Columbia House (I think that is the company), which is their online store. Additionally, they have had prices cheaper in their online store.

Major channel conflict and retailers are not too happy. I will try to find this article.

However, it shed light that this stuff is going to backfire for these companies.

**disneygal** · 10-04-2005, 09:29 AM

I also heard that Safilo is losing Dior to Marchon if I remember correctly! This came from a Safilo rep!

**CME4SPECS** · 10-04-2005, 11:20 AM

Originally Posted by disneygal

I also heard that Safilo is losing Dior to Marchon if I remember correctly! This came from a Safilo rep!

I wouldn't call that much of a loss!

**Mikef** · 10-04-2005, 08:11 PM

Originally Posted by disneygal

I also heard that Safilo is losing Dior to Marchon if I remember correctly! This came from a Safilo rep!

I thought I heard they renewed not that long ago!

**Mikef** · 10-04-2005, 08:19 PM

Originally Posted by For-Life

I was actually reading an article about Sony in the exact same situation. They have forced its retailers to advertise Columbia House (I think that is the company), which is their online store. Additionally, they have had prices cheaper in their online store.

Major channel conflict and retailers are not too happy. I will try to find this article.

However, it shed light that this stuff is going to backfire for these companies.

Sony has been selling direct for years.

Most products are sold direct but usually at MSRP. Then its up to the customer. The problem with this business is the MSRP on sunglasses is to low and NO MSRP on RX frames. Oakley is sold for the same price everywhere! I see a frame I sell in one shop for 120 and then go across the street and they are 170. You don't see that in too many other retail products.

**Bradley** · 10-05-2005, 06:51 PM

Thanks for the responses - detailed, humorous (actually, Spexvet, the rep I heard it from was formerly in the garment industry until his company folded due to a big manufacturer going retail similar to our "friends" at Luxottica), and otherwise. Coincidentally my Safilo rep came in the following day (hello, Jim, if yo are reading this) and, while he was aware of the IPO, seemed highly skeptical of the retail aspect of the situation. Guess we'll just wait and see.
Brad