Kering SA of France and Safilo Group Spa of Italy are extending their partnership until 2020. Under a new agreement, Kering will pay $118 million to buy out the last two years of Safilo's Gucci license and enter a new four-year supply agreement starting in 2016 under which Safilo will manufacture eye wear for Kering.
“Eyewear is a strategic category,” Roberto Vedovotto, who joined Kering from Padova-based Safilo in 2013, said in statement. “By bringing the business in-house, Kering aims to help its 11 brands that are active in eyewear “fulfill their growth potential.”
Eye wear generates about 50 million euros of royalties for Kering via license agreements with five different partners, the French company said. Yet, the business is worth about 350 million euros in sales and the market for premium high-end frames is growing at a double-digit rate, Kering said.
Vedovotto, who served as Safilo's CEO, will head Kering’s new eyewear unit and be a co-shareholder of the division, the French company said.
“We are satisfied with furthering our partnership in a way that leverages the heart of Safilo’s strengths in Eyewear product excellence”, commented Luisa Delgado, CEO of Safilo Group. “We have a unique tradition in the market as strategic partner for those brands that consider eye wear as strategic category. Through this agreement we confirm our capabilities as trusted partner”.
Jean-François Palus, Group Managing Director, Kering, added: “We are satisfied to count on Safilo as a partner because their know-how in product development and manufacturing is important for the quality and craftsmanship that we want more than ever for our Eyewear business.”
Safilo’s portfolio encompasses proprietary brands Carrera, Polaroid, Smith Optics, Safilo and Oxydo and licensed brands Dior, Fendi, Gucci, Alexander McQueen, Banana Republic, Bobbi Brown, BOSS, BOSS Orange, Bottega Veneta, Céline, Fossil, HUGO, J.Lo by Jennifer Lopez, Jack Spade, Jimmy Choo, Juicy Couture, Kate Spade, Liz Claiborne, Marc Jacobs, Marc by Marc Jacobs, Max Mara, Max&Co., Pierre Cardin, Saint Laurent, Saks Fifth Avenue and Tommy Hilfiger.
