In a joint decision with the licensor, Italia Independent will not renew the Adidas Original license for sunglasses and prescription frames which expires in December 2019. The Italian company said that it wants to focus on its own brands and partnerships with a “premium” positioning.
Italia Independent booked a net profit of €1.766 million for the first half of this year compared with a €3.143 million loss a year earlier, after a period of restructuring and thanks to a capital gain from the sale of Independent Ideas, a subsidiary involved in advertising.
The group sold a 26 percent stake in Independent Ideas to the French advertising group Publicis in April and a further 25 percent stake to Laps To Go Holding in May 2018. It also sold a 70 percent stake in Alialux in May.
First-half revenues dropped by 26.6 percent to €11.783 million from €16.058 million, largely because of the sale of these assets and the closure of some non-performing businesses.
Eyewear sales dropped to €10.215 million from €13.138 million, largely due to an 88.6 percent drop in sales in Spain to €326,000 from €2.851 million. In the previous year, Spanish sales had been bloated by an extraordinary barter agreement.
Other main foreign markets were also negative with Germany down by 72.9 percent to €155,000 due to a reorganization of the sales team. France declined by 31.6 percent to €143,000 and North America fell by 83.4 percent to €157,000 due to the change of the group's distributor. In the rest of the world, sales dropped by 15.2 percent to €2.171 million. However, Italia Independent enjoyed increases of 98 percent in Asia and 126 percent in South America.
The group had about 1,700 directly-managed clients in Italy and 1,350 abroad, mainly in Spain, France and Greece. In those markets, Italia Independent works with a network of agents, while in other markets it has wholesale distribution agreements. Overall, the group is distributed in 56 countries.
In Italy, the company's revenues from eyewear grew by 21.1 percent to €7.263 million.
The group's gross margin narrowed to 60.5 percent in the first half from 64.2 percent a year earlier. The gross operating profit, or Ebitda, rose to €512,000 from €35,000, and pre-tax profit declined to €2.280 million from €2.987 million loss a year earlier.
Net debt fell to €21.839 million at end June from €24.602 million at end December.
Following Italia Independent's latest €4.89 million rights issue, Lapo Elkann increased his shareholding to 68.27 percent from 63.8 percent before the transaction.
The other main shareholders after the recapitalization were John Philip Elkann with a 7.02 percent stake, Due G Holding with a 5.80 percent stake and Pietro Peligra with a 1.01 stake. The remaining shareholders had a combined stake of 17.89 percent.
Italia Independent's capital is composed of 6.631 million shares.