The integration of Ray-Ban has been completed ahead of schedule, and the market's positive response to the brand's new sales strategy has been quicker than expected, allowing Luxottica to improve its results sharply n the first 6 months of 2000. The group's turnover soared by 40.6 percent to 2,433.9 billion lire (e1,257.2m-$1,147.8m). The gross profit rose by 37.1 percent to 71.2 percent of sales. The operating margin improved from 16.2 to 17.9 percent of sales. The group's consolidated net earnings grew at a spectacular 72.2 percent rate to reach 281.3 billion lire (e145.2 million-$132.6m), representing a nice 11.6 percent net margin as compared to 9.4 percent in the year-ago period.

Luxottica enjoyed a 15.4 percent net profit margin in 1994. The decision to invest on retailing in the USA through the purchase of LensCrafters the following year depressed the ratio. So did last year's acquisition of Ray-Ban, which caused the group to register a net margin of only 8.1 percent for the full year, but like in the case of LensCrafters, sales and earnings have recovered rather quickly.

Leonardo Del Vecchio, founder, major shareholder and chairman of Luxottica, is now forecasting a turnover of 4,500 billion lire (e2.3bn) for all of 2000, as compared to 3,628 billion lire in 1999, with a net profit margin of over 10 percent.

The decision to target the sunglass market has proved an excellent strategic move. Yet, not all the companies within the sunglass division are performing at the same level. Luxottica has purchased all the shares in Brico, which had a low level of profitability, but it has then transferred its ownership to the Del Vecchio family's financial holding company, Leonardo Finanziaria.

Over half of the group's turnover is still generated by LensCrafters's 858 outlets in North America. With a sales increase of 7 percent in the latest 6-month period, or 6.2 percent on a same-store basis, the chain's turnover reached $648.5 million, but the growth rate slowed down a little in the second quarter.

Luxottica sold a total of 15.7 million frames in the first half of 2000, including 8.1 million pairs in the April-June period, representing an increase in volume of 39.2 percent as compared to the same period last year, but the increase in value was much higher. Revenues from production and wholesale distribution amounted to 1,126.8 billion lire (e582m-$531.4m), or 63.7 percent more than in the year-ago period. These operations generated a 23.5 percent operating margin. For its part, LensCrafters raised its operating income by 28 percent to $98.5 million.

The excellent results have allowed the group to reduce its debt since Jan. 1 by 264.9 billion lire (e136.8m-$124.9m) to 1,925.1 billion lire (e994.4m-$907.9m).