The crumbling of the Turkish lira has had serious consequences for De Rigo Vision, one of whose three optical chains, Opmar Optik, with 75 points of sale, operates in the country. The new monetary crisis that broke out in early August, shaking up the government of Prime Minister Erdogan, has caused the Turkish lira to drop precipitously against the dollar, and thus against other currencies as well. By early March, the Turkish currency crisis had already started, affecting De Rigo's results in the second quarter.
From January to June 2018, a recovering Opmar had the wind at its back, with sales in the Turkish lira up by 43 percent. But, converted into euros, they were down by 9 percent. The Italian group is insured against foreign exchange risk, but in this instance the insurance policy has covered only part of the damage. It's no coincidence that Maurizio Dessolis, De Rigo's vice president, was in Turkey during the last week of October.
The impact on De Rigo Vision Group's figures for the first half of the year was inevitable. At current exchange rates, group revenues for January to June 2018 were down by 2.3 percent to €223.6 million. However, at constant currencies, with the Turkish monetary crisis stripped out, group revenues for the first half of this year were flat, inching down by 0.3 percent.
The other large chain controlled by the group, General Optica, with 200 points of sale on the Iberian Peninsula, posted growth of one percent for the first half. For the 12 months of last year, De Rigo's retail revenues amounted to €186.5 million, or 43 percent of its total revenues. This doesn't include the 450 stores of Boots Opticians in the U.K., in which it holds a minority stake of 42 percent.
No breakdown could be obtained between retail and wholesale revenues for the first half of the year.
In the wholesale channel, De Rigo now has a clear strategy for the management of the eyewear license it obtained months ago from Mulberry, the leathergoods manufacturer, which will be selling glasses produced by De Rigo through its network of mono-brand stores. Mulberry has 109 such points of sale worldwide, including 39 in the U.K. and 19 in South Korea. If we add De Rigo's retail network, including the Boots stores, the company can count on direct sales of Mulberry-branded glasses through more than 850 stores.
The Mulberry launch will take place in three phases: first in January 2019 in U.K., then in the second half of 2019 in Northern Europe, and in November of 2019 in South Korea.
At the Silmo show in Paris, De Rigo concentrated its efforts for the French market on two brands: Carolina Herrera and Converse. The latter is now in the portfolio of all of De Rigo's European subsidiaries. After a decade's absence, the Longarone-based group returned to the Parisian show in a satisfying way, indicating that everything is place for a renewed presence in 2019.