Business Plan 2020-2024
On December 10, 2019, the Board of Directors of Safilo Group S.p.A. approved the new Group Business Plan 2020-2024.
The Group aims to deliver sales growth and margin expansion through a modern customer-centric and consumer-oriented business model, powered by a new digital transformation strategy.
“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.”
Angelo Trocchia, Safilo Chief Executive Officer
The new Plan incorporates the effects of the Group’s most recent business developments, and in particular:
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.
Strategic objectives and levers of the Group’s new Business Plan
Deliver Business Growth
The Group continues 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 an acceleration of the initiatives to digitally transform the Company’s business model, with a more decisive digital shift of its mix of capabilities and investments:
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;
Safilo is developing a strong Digital and Social Marketing Strategy, bringing in new skills and undertaking new investments to strengthen a core business opportunity to amplify the Group’s relevance and effectiveness with both its customers and consumers.
After the presentation of its Group Business Plan, on February 10, 2020 Safilo signed and closed the acquisition of Privé Revaux, a fast-growing US brand born thanks to and fuelled by a strategic celebrity ecosystem, which empowers strong social media engagement and digital marketing activities.
D2C E-Commerce is a channel in significant growth also in the Eyewear Market and Safilo wants to accelerate both through strategic commercial partnerships and through the acquisition of new important capabilities, as the acquisition of Blenders Eyewear, communicated on December 9, 2019, testifies. This brand has in fact built an advanced direct-to-consumer e-commerce platform with unique digital and social media skills, successfully engaging and selling to Millennials and Generation Z consumers.
Deliver Margin Expansion
The Group is pursuing an efficient cost structure, which responds to the requirement to realign Safilo’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 Group will continue its cost optimisation program to recover higher margins, working both on the cost of goods sold as well as at the operating expenses level. The areas of intervention and the initiatives on which the Company focuses are substantially in continuation with the work done to accomplish the previous cost productivity plans, such as the search for new opportunities in procurement, efficiencies in plants fixed costs, reduction of lead times, completion of Eyeway roadmap;
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.