The board of directors of Safilo Group S.p.A. on Tuesday approved the new Group Business Plan 2020-2024. The new plan incorporates the effects of the Group’s most recent business developments. These are:
- the sale of the Solstice retail business, which took place on July 1st, 2019;
- the extension of the brand Marc Jacobs until December 31st, 2026; the exit of the brand Dior from January 1st, 2021; the exit of the brand Fendi from July 1st, 2021;
- the renewal of the Tommy Hilfiger, Hugo Boss and Kate Spade licenses;
- the renewal of the supply agreement with Kering Eyewear;
- the launch of the new licenses signed during 2019, namely Missoni and M Missoni, Levi’s, David Beckham, and Under Armour, an iconic sports brand just recently signed;
- the acquisition of Blenders Eyewear, a fast-growing California digitally-native brand, which will enrich the Group’s proprietary brand portfolio and direct-to-consumer business.
The strategic objectives and levers of the Group’s new business plan are:
- to develop a modern and successful Customer-centric and Consumer-oriented business model, powered by a new 360° digital transformation strategy;
- to deliver Sales Growth, by placing customers and consumers at the heart of the strategy, and accelerating initiatives to digitally transform the Company’s business model. Over the coming 5 years, starting from 2020 in Europe, Safilo intends to strengthen and enlarge its client base by pursuing a customer-centric strategy, redesigning its Customer Experience, Engagement and Customer Care activities through the adoption of the latest technologies in the B2B, CRM (Customer Relationship Management) and salesforce automation fields; The Group will continue developing a multi-segment and multi-channel portfolio strategy by also accelerating
- projects to build an ever-closer connection with the end consumers. Safilo is pursuing this strategic choice through a more decisive digital shift of its mix of capabilities and investments, from digital and social marketing to Direct-to-Consumer distribution, a channel in significant growth in which Safilo wants to accelerate both through strategic commercial partnerships and through the acquisition of new important capabilities, as the acquisition of Blenders Eyewear testifies. This brand has in fact built an advanced direct-to-consumer ecommerce platform with unique digital and social media skills, successfully engaging and selling to Millennials and Generation Z consumers;
- to deliver Margin Expansion, through an efficient cost structure, which responds to the requirement to realign the Group’s current industrial capacity to the future production needs and to achieve further costs of goods sold and overheads efficiencies, guaranteeing the Group’s economic and financial solidity and the pursuit, during the Plan’s timeline, of a recovery of the levels of profitability to which Safilo aspires.
The exit of the LVMH luxury licenses makes it necessary for Safilo to initiate an industrial reorganization and restructuring plan, promptly responding to the new production scenario that the Company will be facing, by realigning its manufacturing footprint.
The plan, which is drawn up to safeguard the Group’s competitiveness in favour of the workers who will remain in force, identified a total of approximately 700 redundancies in 2020 in Italy.
Safilo has opened a negotiation table with the trade unions and the workers’ representatives in order to identify all the available social security tools to manage the impact on the people involved in the best possible way.
Angelo Trocchia, CEO, said: “We are today updating and extending our Group Business Plan, confirming the strategic objective to deliver business growth, leveraging the significant progress achieved in the last 18 months thanks to a tight action plan to recover top line growth and operating margins.
“There are clear challenges and opportunities posed by the evolutions of the market context, from the internalization of luxury eyewear by the two key industry players, to the ongoing industry consolidation and digitalization. Today, at Safilo, we are facing them all, with a pragmatic approach, updating and upgrading our business model with clear, new and necessary choices.
“We will continue preserving and enhancing our undisputed leadership in design, product development and innovation, our global commercial footprint and our strong know-how in brand management to continue pursuing a high-potential multi-segment brand portfolio strategy. At the same time, we are now upgrading our business model through a more decisive shift towards a digital transformation strategy, which will support and enable significant improvements of our customer-centric activities through the adoption of innovative, state of the art digital contents and services, as well as allow a more significant growth of our Direct-to-Consumer e-commerce activities through an increasing mix of internal and external capabilities and investments.
“Today, we also need to reorganize our manufacturing footprint by realigning its current capacity to our future production needs, thus safeguarding the Group’s competitiveness and financial solidity for the long term. Despite the call for the emergence of alternative solutions, the new industrial plan ultimately impacts a significant number of people, for whom we will activate all the best possible and most responsible solutions, working closely with trade unions and workers’ representatives.
“With our economic and financial targets, we aim for Safilo to become a modern leader of the eyewear industry, a more balanced and profitable player across its markets, brands and product segments.”