De Rigo posted sales of €429.5 million in 2017, up by 3.8 percent in euros and by 5.5 percent in local currencies. Wholesale revenues increased by 8.1 percent at constant currency rates to €254.1 million, lifted by the acquisition in 2016 of Rem Eyewear and higher sales of licensed brands like Carolina Herrera, Furla and Converse.
The company's house brands - Lozza, Lozza Sartoriale, Police and Sting – represented about 38 percent of wholesale revenues, with 30 percentage points stemming from Police and 8 points from the other brands. The group aims to lift the share of house brands to 40 percent in the near term.
The retail division raised its currency-neutral revenues by 2 percent, reaching a level of €189.5 million, driven by the Spanish chain General Optica, which opened six stores in 2016. General Optica currently has 194 directly-operated stores (DOS) and 54 stores in franchising. In Iberia, the group also owns Mais Optica, which has 18 DOS and 15 franchised stores in Portugal.
De Rigo has plans to open 30 more DOS in Iberia by 2021, starting with about 10 this year. In the meantime, De Rigo has frozen store openings in Turkey, where it owns another optical chain, Opmar Optik, due to the collapse of the Turkish lira. The chain manages 74 DOS, three of which were opened last year. The group also has a 42 percent stake in Boots Opticians, the big U.K. retailer, so its sales are not consolidated into De Rigo's accounts.
De Rigo does not currently have plans to expand the retail network in other countries but the management says it remains open for acquisition opportunities in stable industrialized markets.
At the end of 2017, De Rigo had a net cash pile of €32 million. The company's deputy chairman, Maurizio Dessolis, noted that even though the group is “cautious,” it is “not allergic” to debt and could accept a leverage of up two times Ebitda to finance its expansion.
De Rigo's European sales grew by 1.2 percent last year, driven by Iberia and Germany while sales in the Americas increased by 30 percent, driven by the U.S. and Brazil, thanks largely to the integration of Rem.
Sales fell by 11 percent in the Middle East and by 12 percent in Asia. The company blamed geopolitical tension in those regions for the decline. It pointed out that various regional crises affected trade in the Middle East, which also suffered from a decrease in wealthy visitors and their replacement by less affluent tourists, who purchased cheaper products. In Asia, the group's two largest markets, South Korea and Japan, were negatively impacted by tensions with North Korean and a resulting drop in tourist flows.
This year, the group will focus on reinforcing its presence in the U.S. and Dubai, while developing the brands acquired through Rem, particularly Converse, John Varvatos, Lucky Brand and Jones New York. The four brands represent annual sales of about $40 million in the U.S., more or less equally divided among each other.
De Rigo started distributing Converse through its European network on Jan. 1, taking over the role from a previous joint venture between Rem and Mondottica, and the first weeks in operation already exceeded its budgeted sales for the year. In the region, the line is sold through the group's local subsidiaries and a network of distributors.
Converse eyewear is also being marketed in the Middle East through the group's Dubai unit and in Asia through its Chinese and Hong Kong subsidiaries. Its distribution in Brazil is scheduled to start in March. The Converse brand is sold at an average retail price of €100-120 per pair.