De Rigo Group CEO on the evolution of the luxury eyewear market
Michele Aracri, CEO of Italian based eyewear maker De Rigo Group shares exclusively with CPP-LUXURY.COM his insights on the evolution of the luxury eyewear market as well as his company’s competitive edge.
HOW DID YOUR COMPANY PERFORM IN 2013 AND WHAT ARE YOUR EXPECTATIONS FOR 2014?
De Rigo Group ended 2013 after another positive year, showing net sales of €368 million, 1.6% growth (at constant exchange rates) and a positive net financial position which significantly increased from €4.3 million to €13 million; all in all strengthening last year’s record-high results.
The wholesale division, which not only produces and distributes the group’s own brands, has 13 overseas distribution subsidiaries and brands licensed by luxury international groups, achieved €219.6 million net sales in the year, i.e. +3.7% (assuming constant exchange rates) compared to 2012. The retail division achieved €148.4 million net sales.
For 2014 we aim to consolidate the sales of 2013 and in general expect to increase the volume. While there’s the risk that the turnover will be affected by exchange rates against the Euro in strategic markets such as Turkey, Japan and Brazil, we still expect an increase in revenue, especially for house brand Police and luxury brand Chopard.
CAN WE SPEAK OF ‘AFFORDABLE LUXURY’ IN EYEWEAR?
No doubt eyewear enables people access to luxury brands, with a strong fashion content in spite of an affordable economic investment. For instance, Chopard jewellery and watches represent the ultimate in uber-luxury while Chopard sunglasses can be purchased at a retail price starting from 400 Euro, thus becoming accessible to a wider audience of consumers while maintaining
exclusivity in terms of materials, design and the selection of the point of sale.
WHICH ARE THE CHALLENGES OF DEVELOPING A NON-FASHION RELATED EYEWEAR BRAND SUCH AS POLICE?
Surely it can be said that the eyewear collections of big fashion brands take advantage of the fame and popularity of that brand. Police for example is not a fashion brand, yet it was the first eyewear brand to turn sunglasses from simple functional objects to a real fashion accessory.
Our challenge is to stand out within the arena of design, always being careful to anticipate trends correctly and to continue on as pioneers in eyewear. One example is that of the blue mirrored lenses which were invented by Police at the end of the ’80s, later becoming a worldwide phenomenon.
An attention to design and innovation is shared amongst all Police licenses: watches, jewellery and fragrances. Just refer to the great success of the fragrance “To Be” launched last year and characterized by the sophisticated glass bottle shaped like a skull (+43% in sales at the end of April 2014 compared to 2013).
WHAT WERE THE INGREDIENTS FOR SUCCESS OF THE POLICE BRAND? WHAT ROLE DID DISTRIBUTION PLAY IN THE SUCCESS OF THE BRAND?
We pride ourself on our ability to offer an innovative and design-led product at a good quality/price ratio. With this we are able to meet the needs of different markets customizing collections based on those needs. Our design office is based in Italy, but communicates with our other design offices in Hong Kong, Japan and South Korea making sure that everything from the change in cultural trends to the general fit of the glasses is noted – we work to “Asian fitting” specifications.
Last but not least, a very important element of the success of Police is its communication with the customer. We have recently announced Brazillian born, Barcelona team member, Neymar Jr as global ambassador; he is a young talented footballer and represents like no other DNA of Police, with his unique and unconventional style. Neymar Jr. follows in the footsteps of previous Police ambassadors including Bruce Willis, George Clooney, David Beckham and Antonio Banderas.
In terms of distribution, we are able to directly manage the key markets for the brand through 13 branches. In other countries, we have strong and long-standing business partners with whom we share the marketing strategy and communication most appropriate for their market.
TELL US MORE ABOUT YOUR DISTRIBUTION APPROACH IN EMERGING MARKETS SUCH AS INDIA AND AFRICA. WHICH DO YOU SEE AS THE CHALLENGES AND THE OPPORTUNITIES?
With regards to the distribution in India, unfortunately there are barriers when it comes to entering the market, especially for the import duties. Despite this, the Indian youth are incredibly interested in the Police brand and for this reason we produce collections specifically for them.
We have always had good presence in the African market, especially in the North. Police is a leading brand in both Morocco and Egypt and until just over a year ago, we had a local ambassador for these: the singer Tamer Hosny. Unfortunately, the “Arab Spring” has restricted consumption – especially in Egypt – but we are positive to recover the market share. Tunisia and Morocco are still steadily growing.
WHICH HAVE BEEN IN THE PAST YEAR THE MOST DYNAMIC MARKETS WORLDWIDE FOR YOUR COMPANY? (BOTH HOUSE BRANDS AND LICENSED BRANDS)
The countries with the fastest sales growth rates in 2013 were Spain, France, Turkey, Japan and Brazil, even with some of these places suffering a strong depreciation of their local currencies against the Euro. Also after a few years of difficulty, the Italian market is growing and now covers around 10% of our turnover.
The U.S is a market of great interest to us and has the potential to be huge. We have recently opened an office in Miami with a distribution platform that also serves Central and South America. Mexico and Brazil are also growing exceptionally quickly.
IS THERE A PARTICULAR TREND YOU IDENTIFIED IN FASHION BRANDED EYEWEAR IN THE PAST YEARS? (SHAPE,
PERFORMANCE OF LENSES, MATERIALS, FINISHES ETC.)
In recent years we have witnessed success across several trends. Everything from wrap-around shapes in the 2000s to the great success of acetate sunglasses in 2010. Nowadays, especially in the Mediterranean countries, the coloured lenses seem to be an unstoppable phenomenon, with both round and oval shapes being top of people’s wish-list.
For next season we will see the return of metal frames with added innovation when looking into production concepts.
INNOVATION HAS BEEN A KEY FACTOR IN THE SUCCESS OF YOUR COMPANY. TELL US MORE.
Innovation and research, both in materials and design, are essential elements to remain competitive and stand out in a market with an offer as extensive as that of eyewear. For this our brands and collections have always been charaterised as some of the best.
The latest result achieved in terms of innovation in the company have just be developed for our house brand Lozza, the most ancient eyewear brand in Italy (founded in 1878). It’s “Lozza Sartoriale” project, developed together with Politecnico di Milan, is an exclusive tailor-made project for creating made-to-measure eyewear, inspired by creativity and based on the customer’s requirements.
Today’s consumer is increasingly focused on the pursuit of the original and the unique. For example, knowing that you own a customised piece of eyewear that suits your face perfectly in terms of size, shape, material and colour, is an extremely desirable element. To meet this growing demand, Lozza has decided to give its clientele the chance to experience an exclusive form of customisation, inspired precisely by their very own ideas and creativity.
The result is tailor-made eyewear that is fully made-to-measure through a clever blend of craftsmanship and digital technology influenced by the expertise and experience of opticians. Indeed, the optician, along with the customer, plays a vital role in this new design service, with Lozza providing him with the tools to become a true ‘tailor’ of his trade.