Airess has joined the chorus of European suppliers who complain that many of their customers, particularly those in the Middle East and Asia, are paying their bills much later, in some cases because some large Italian competitors are offering better conditions. Besides, late last year this large French manufacturer of eyewear frames moved its European distribution center from Oyonnax to a new 8,000-square-meter logistic platform in Lyon, causing a delay of about one month in its deliveries.
These developments have caused a temporary cash squeeze for the company, leading the management to launch a reorganization plan involving the layoff of 35 of its 400-odd employees in Europe, mainly in relation to the shutdown of a small production site at Morez that previously belonged to Buffard.
Airess has already started reorganizing its own logistics as part of its e2 million investment in Lyon. It has been setting up in the last few months a new supply chain management system, less complex than the one recently implemented by L'Amy, that will help centralize logistics and reduce inventories at the European level by about 30 percent. Half of the work has already been done. Small inventories will still be kept in the subsidiaries that Airess controls in Germany, Italy and Switzerland, but they will be coordinated from a single platform.
Company officials stress that Airess is still in good shape otherwise. The company had a net profit of e1 million on sales of e65 million in the year ended last June 30. Sales rose by 7 percent in the 1st half ended last Dec. 31 and orders are up.
Furthermore, Airess is in negotiations for the acquisition of other licenses. Speculation centers around the Lanvin brand, which is reportedly being shed by Logo, or Guy Laroche, another French fashion brand that L'Amy is dropping from the portfolio it inherited in 2001 through its acquisition of Grasset.
Incidentally, contrary to some other French companies in the sector, Grasset has reported excellent results lately. In 2002, the company reached a net profit margin of 7.5 percent on sales of e10.49 million, which rose by 3.9 percent from 2001. Besides its Seiko Titanium collection, Grasset has the license for Agnes B eyewear and markets the Timberland, Converse and Carolina Herrera brands inFrance in behalf of Rem Eyewear and Indo, which both have sales exchange agreements with L'Amy. Grasset has now added a licensed collection of Chipie eyewear.
Airess' main business remains related to major licenses like Escada or Kenzo. On the other hand, the negotiations over the possible sale of Solistyle, Airess' profitable mass market operations, have been suspended. They are expected to be resumed in July, after the conclusion of Airess' financial year.
Meanwhile, Hervé Perrot, who has been instrumental in the reorganization of Airess' purchasing and logistics functions, has been appointed as its sales manager for France, replacing Pascal Tarte who has left the group. Xavier Terle, marketing manager of the group, who negotiated its recent licensing deal with Dunhill, remains in his position and adds the title of vice president of SLPCE, a local eyewear and plastics industry association in Oyonnax.