Safilo's strategies for staying strong in the Us

In recent years Safilo has accelerated the readjustment of three key factors for staying strong in North America: margins, price lists and production.

In 2003, the local market accounted for 36% of the eyewear group's revenues, a share that has declined compared to two years ago (40%). In order not to lose ground in its most important area, first and foremost the Group has limited price-list increases. 'Between our billings and those of the subsidiary, we have absorbed a good part of the added cost of the exchange rate by reducing margins. On the other hand, we have toughened the decision to buy certain products outside the Euro zone', says company president Vittorio Tabacchi Il Sole 24 Ore.

A choice made consequently to the Italian production costs, which weigh heavily on the manufacturing industry. 'Today', Tabacchi adds, '40% of our production is outside the Euro zone and almost all of it is in China. We get our supplies from there for the lowest segments of our production. But at the same time, we are strengthening our production in Slovenia. It's just around the corner, but it allows us to have much more advantageous conditions'.

However, the heart of the production remains in Italy: 'Here we produce 45% of the total, starting with the most important brands like Gucci, Armani, Boucheron, Dior, Yves Saint Laurent. Slovenia has slightly less than 15%'.

In the first ten months of this year, the American market reacted well. 'We have to take into account that there's an extra line, Liz Clairborne, but growth has been 5% and that's a good figure'. The overall forecast for this year is growth (+10% for the first nine months at constant exchange rates, +6% at current exchange rates), but the squeeze on margins can't go on for long. Tabacchi is therefore calling on the Central European Bank to react to the American policy of protecting manufacturing companies.