Oct 4, 2012
Ray-Ban maker Luxottica to keep pace with fast-fashion
Oct 4, 2012
MILAN - Luxottica (LUX.MI), the world's biggest maker of designer sunglasses, is to spend more than 200 million euros (159.3 million pounds) over three years to increase production and also to cut delivery times to keep up with fast-moving fashion trends.
The Italian company, which makes Ray-Bans and also sunglasses for luxury brands such as Prada (1913.HK) and Gucci, will invest the cash to boost production in Italy, China, US, Brazil and India.
The investment will reduce the time between placement of orders and delivery by 30 percent and inventory days by 20 percent, the group said at an investor day on Monday.
Major clothing retailers Hennes & Mauritz AB (HMb.ST) and Zara owner Inditex (ITX.MC) have led the so-called fast-fashion revolution by giving shoppers fresh products each time they enter a store.
Luxottica has already cut the time to market for new products by 44 percent and the re-order lead time for existing models by 43 percent between 2009 and 2012, the company said. Improved logistics has helped cut costs by 12 percent.
Chief Executive Andrea Guerra said demand in the third quarter was in line with first-half results, making him optimistic for 2012 despite the global economic turmoil.
"Luxottica has been able to deliver eyewear collections faster, enriched with more sophisticated decorations and innovative materials, to stores," Guerra said in a statement released during the investor day.
"Continuous focus on speed, flexibility and efficiency will reflect positively into future revenues and earnings," he said.
The economic downturn has also prompted luxury makers such as Chanel, Louis Vuitton (LVMH.PA) and Hermes (HRMS.PA) to take charge directly of supply and delivery to move stocks rapidly and avoid rising stock levels.
Luxottica, which in Italy competes with smaller rival Safilo (SFLG.MI), expects to produce 100 million frames in 2015.
It expects profits to grow twice as fast as sales this year, which in turn are expected to rise by a high single-digit percentage.
The company said in July that net sales rose 15.1 percent to 3.7 billion euros ($4.8 billion) in the first half of the year. But sales in Italy and Spain fell 4 percent in the second-quarter.
Shares in Luxottica were up 1.67 percent at 27.9 euros at 1200 GMT, in line with Milan blue-chip index .FTMIB.
($1 = 0.7773 euros)
(Additional reporting by Francesca Landini. Editing by Jane Merriman)
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