Growing flexibility in manufacturing and other processes should help Marchon to take better advantage than its Italian competitors from the rapidly declining value of the dollar, especially by making greater use of its new Chinese facilities. On the other hand, improved sales forecasting and production planning, combined with the use of the internet for the exchange of highly sophisticated digital 3D CAD/CAM mock-ups of its frames, are helping the group to reduce inventories and to improve customer service.
Fill rates have increased to more than 90 percent, and while some more SKUs have been eliminated from the standard product range, the US company is now beginning to develop special make-ups for its larger customers. The establishment of a European warehouse in Holland one year ago has helped to speed up processes in this part of the world. Germany will be hooked up to the system this month and the UK should follow in October, but the large Italian operation, which has also major design and sourcing functions within the group, will stand on its own feet.
The latest significant move in the reorganization of Marchon EMEA (Europe, Middle East and Africa), which is being conducted under the management of Thomas Zettler, was a joint venture deal in Switzerland with an agent, Daniel Otten. Marcolin previously distributed Marchon's Calvin Klein eyewear in that country.
Including subsidiaries and distributors, Marchon EMEA generated sales of nearly €100 million last year, slightly up from the year before, while net revenues within the group remained flat at around $340 million. Total sales outside the USA reached more than 35 percent of turnover.
The declining dollar helped to pull up Marchon's global sales by 8 percent in the 1st quarter of this year, thanks mainly to its designer frames. Due in large part to the market situation, sales of sunglasses are now getting close to 50 percent of total sales, down from a previous peak of 80 percent. Marchon and its German partner, Eschenbach, are marketing strongly their Flexon frames, using even the TV medium in certain countries. Marchon's sales of Nike branded ophthalmic frames are very brisk and are now higher than Oakley's reported sales of similar products.