The acquisitive French optics company Essilor International reported sales at its Sunglasses & Readers segment grew 35.6 percent in the fourth quarter thanks to the addition of the Costa and Native brands and strong organic growth at its Chinese brand Bolo.
Essilor reported segment revenues reached €132.0 million ($165 mm) compared with €97.3 million thanks largely to the Feb. 1 acquisition of Costa Inc., which owns the Costa and Native sunglasses brands. Bolon, one of two mid-range Chinese sunglasses brands picked up in its Nov. 1, 2013 acquisition of Xiamen Yarui Optical, led the segment to organic sales growth of 6.7 percent. In currency-neutral terms, segment sales rose 29.4 percent.
Full-year sales at the Sunglasses & Readers segment climbed 41.7 percent (41.5 percent currency-neutral) to €503.0 million ($669 mm), again due primarily to acquisitions. Essilor said both Costa and Xiamen Yarui, which also owns the Molsion sun brand, delivered strong growth in line with expectations.
Challenges at FGX North America
Full-year organic sales declined 1.0 percent at the segment due to challenges in FGX International's North American business.
Rhode Island-based FGX distributes sunglasses under both its own labels including Foster Grant, as well as a dozen licensed sports brands. Its sports brand portfolio includes Anarchy, Body Glove, Champion, Gargoyles, Field & Stream, Ironman, Mongoose, Rawlings, Reebok and X Games Gear.
“At a time of rising consumer sales, business was dampened by extensive inventory draw downs by leading customers, especially in the second half, the postponement of certain eyewear line refreshes, and the loss of space at a large account,” the company reported. “Outside North America, FGX enjoyed robust business, with double-digit gains in Latin America and strong growth in Europe.”
Essilor reported total revenue, including its core lens manufacturing and prescription eyewear business, grew by €605 million ($804 MM) to €5.67 billion ($7.5 bn) in 2014. That include €525 million ($698 mm) in revenue attributable to investments Essilor made to acquire or increase its stake in 12 companies during the year. In addition to Costa Inc., Essilor acquired the remaining 51 percent of photochromic lens maker Transitions Optical, acquired online contact lens dealer Coastal.com and the Chinese sunglasses brand Prosun.
In 2015, Essilor expects to deliver organic revenue growth of 4.5 percent and overall c-n revenue growth of 8-to-11 percent barring major acquisitions. Adjusted contribution from operations, which excludes non-recurring items and shared based compensation, is expected to rise 20 bps to 18.8 percent of revenue.
Editor's Note: Essilor's impact on the sporting goods industry goes well beyond optics. Since selling Coastal.com to Essilor for $430 million last year, Roger Hardy has acquired OnlineShoes.com and ShoeMe.ca in bid to take on Zappos.com in North America.
