Annual Report 2005

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Annual Report 2005

DIRECTORS’ REPORT

Activities of the Group

The Safilo Group is present in the eyewear market for over 70 years and is the second operator

worldwide, in terms of revenues, development, production and wholesale distribution of products on

the eyewear market, such as optical frames, sunglasses and sporting articles, among which ski and

motocross goggles and technical glasses for other sports.

The Group is world leader in the high-end market and manages a brand portfolio of own and licensed

brands, selected based on the criteria of competitive positioning and international prestige, in order

to implement a precise strategy of segmentation of the clientele. The Group has progressively

expanded its brand portfolio to include licensed brands of the luxury and fashion world, establishing

long-term partnerships with its licensors through contracts lasting 5 to 8 years, most of which are

repeatedly renewed over the years.

The leading Group brands are Safilo, Oxydo, Carrera, Smith and Blue Bay. The Group’s primary

licensed brands include Alexander McQueen, Bottega Veneta, Boucheron, Diesel, 55DSL, Dior,

Emporio Armani, Fossil, Giorgio Armani, Gucci, Imatra, Jennifer Lopez, Juicy Couture, Kate Spade,

Liz Claiborne, Marc Jacobs, Nine West, Oliver, Pierre Cardin, Polo Ralph Lauren, Saks Fifth Avenue,

Stella McCartney, Valentino and Yves Saint Laurent.

The Group directly controls the whole production – distribution chain, which relates to the following

phases: research and innovative technology, product design and development, planning,

programming and purchasing, production, quality, marketing and communications, selling,

distribution and logistics. Safilo is strongly involved in the development and design of the product,

undertaken by a team of designers capable of guaranteeing innovative stylistic and technical

continuity which since ever represents one of most important strengths of the company.

The production is carried out in five factories owned by the Group, four of them located in Italy and

one in Slovenia. For products purchased from third parties, the Group has created a team specialised

in testing that the quality of items purchased is in line with the Group’s best standards.

The selective distribution is carried out at three main distribution centres - a headquarters at Padova,

a centre at Parsippany (New Jersey, USA) and at Hong Kong - and by other minor distribution

centres, ensuring an optimal level of service to clients. The Safilo Group is present in approximately

130 countries, of which 30 through its direct sales branches, while in the remaining countries the

distribution is carried out through over 170 independent distributors. Each branch coordinates a

consolidated network of local sales representatives, which operate prevalently in exclusivity, reaching

over 130,000 retail outlets, including opticians, optometrists, ophthalmologists, retail chain stores,

department stores and other specialised outlets. The Group maintains a high level of customer

relations, and the reputation of its clientele ensures appropriate positioning of Group and licensed

brands. In particular, its strategic choice to select retailers for the products and their positioning

inside the retail outlet has been a point of strength with the licensors of prestigious brands and a

distinguishing factor from the Group’s major competitors.

Activities of the Group

Safilo Group S.p.A. Directors’ Report

17

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