Giorgio Fedon, the leading Italian producer of eyeglass cases, is changing strategy, down-scaling its diversification into small leathergoods. The company saw its net loss rise to €5 million in 2018 from €4 million a year earlier, due to lower sales and higher costs, but its core business of selling eyeglass cases to manufacturers improved.
Overall, the Italian company's revenues for the year dropped to €65.8 million from €67.4 million, but sales of cases to eyewear producers rose by 3.4 percent to €53.3 million. Sales to optical stores dropped to €6.4 million from €7.5 million after a reorganization that took longer than scheduled.
On the other hand, the company registered a 27.2 percent decline in leathergoods sales stemming from the closure of nine non-performing stores and delays in the ramp-up of three new stores in Spain. Fedon's network of mono-brand stores shrank to 16 locations from 22 with a presence in Italy, Spain and Asia. The business also suffered a decline in wholesale revenues.
Fedon expects that its efforts to improve its market presence, the introduction of new products, the digitalization of its sales channels and the personalization of its products will have a positive impact on 2019 results in this segment.
The company's gross operating profit, or Ebitda, slumped to a negative level of €0.4 million last year from a positive level of €2.2 million in 2017, but the company pointed out that the profitability of its core business improved during the year, with Ebitda growing to €3.0 million in the second half from €0.2 million in the first half of 2018.
After amortization and depreciation, the operating loss (Ebit) widened to €4.7 million from €3.2 million after the company booked €2.1 million in amortizations and write-downs and a further €2.1 million in one-off restructuring costs. Excluding extraordinary items, the Ebit loss was €2.6 million in 2018. Net debt rose to €9.1 million at the end of 2018 from €7.3 million a year earlier.
The chairman and chief executive of the company, Callisto Fedon, said that 2019 had started “very well” and that efforts to streamline the company and cut costs are bearing fruit. The company added that the reorganization will continue this year in order to further reduce costs and return to “more sustainable” results.