De Rigo: sales results for 2004
De Rigo posted net sales of Eur 514.4 m for 2004, an increase of 1.9% as compared with Eur 504.8 m posted in 2003. Foreign currency effects accounted for 0.9 percentage points of the overall increase in consolidated net sales.
The Group's current businesses continued to perform very positively, as comparisons with the prior year were affected by De Rigo's sale during July 2003 of the controlling interest in Eyewear International Distribution (Eid), a joint venture with the Prada Group. Excluding Eid's sales from the Group's results for 2003, the period on period increase in consolidated net sales was 6.1%.
Highlights of the Group's unaudited sales results for 2004 include:
- wholesale & manufacturing sales decreased by 1.2% to Eur 134.5 m from Eur 136.2 m posted in 2003. Excluding sales made to Eid during 2003 from the comparison, the segment's sales increased by 0.7%;
- sales through the retail companies increased by 7.8% to Eur 389.8 m from Eur 361.5 m in 2003, primarily as a result of positive same store sales growth at both General Optica (GO), the Group's Spanish retail chain, and Dollond & Aitchison (D&A), the Group's British retail chain.
The Group's consolidated net sales of Eur 514.4 m were broken down as follows: eyewear sales of Eur 224.3 m, lens sales of Eur 160.1 m, contact lens sales of Eur 80.0 m and other sales and revenues of Eur 50.0 m as compared with sales of Eur 235.8 m, Eur 143.7 m, Eur 74.7 m and Eur 50.6 m, respectively, for 2003.
Foreign currency translation differences had a positive effect on consolidated net sales, particularly with regard to the translation into Euro of sales made in Pounds Sterling, as the average exchange rate for this currency in 2004 was more favourable to the Group than that during 2003. This increase in the relative value of the British currency more than offset a decline in the average Euro exchange rates for Japanese Yen and Hong Kong Dollars.
Analysing consolidated net sales by geographic area, net sales in Europe increased by 2.9% to Eur 466.8 m, primarily as a result of higher sales through the Group's retail companies. Net sales in the Americas decreased by 34.2% to Eur 7.9 m primarily as a result of the deconsolidation of Eid. Net sales in the Rest of the World increased by 1.8% to Eur 39.7 m, as the impact of the deconsolidation of Eid was more than offset by very positive results posted by the Group's Far Eastern distribution subsidiaries.
D&A's sales grew to Eur 248.9 m, an increase of 7.8% as compared with sales of Eur 230.8 m posted in 2003. Sales grew by 5.8% in Pound Sterling terms, reflecting the increase in its value against the Euro, while same store sales per working day in Pound Sterling terms increased by 6.2%.Sales of franchised stores during the period grew by 5.8% to Eur 66.6 m; in Pound Sterling terms, sales of franchised stores increased by 3.8%. The increase in D&A's sales was primarily attributable to the Company's aggressive marketing campaigns, which drove increased sales of higher quality products. At December 31, 2004, D&A operated a network of 232 owned shops and 140 franchised shops, having closed four underperforming franchised shops during the last twelve months.GO grew sales by 7.8% to Eur 140.9 m from the Eur 130.7 m posted in 2003. GO continued its record of notable sales gains through the expansion of its owned and franchised store network as well as a 6.0% increase in same store sales per working day. Same store sales grew by 4.3% in 2003 and by 8.5% in 2002: the aggregate increase of 20.0% in same store sales over this three-year period highlights the strong and steady growth of GO in the Iberian market. At December 31, 2004, GO operated a network of 148 owned shops and 18 franchised shops, having opened a net total of 6 owned shops and 4 franchised shops during the last twelve months.
Mr Ennio De Rigo, Chairman of the Group, commented on the 2004 sales results: 'We had an excellent reaction to recover the sales we lost after having sold Eid. We look forward to further solid sales results through the contribution of the new license agreements we recently signed: Escada, Chopard, Ermenegildo Zegna and Jean Paul Gaultier. In our retail business our chains experienced strong same store sales growth. At GO we want to continue this growth pattern through the opening of new owned and franchised stores. At D&A, after the very positive 2004 sales results, we are committed in new projects in the areas of company positioning, store refittings and customer service. Our employees were deeply involved in the restructuring process at D&A and their excellent training allowed us to win the Training Excellence Award for outstanding achievements in workplace training and personal development at the National Training Awards 2004: the success of our training raises our profile as a very attractive employer in the British marketplace and is reflected in the satisfaction of our customers, as well as a drop in staff turnover'.
