The large privately held American eyewear group, which is contemplating a possible public offering in the medium-long term, has appointed three new top-notch executives to help manage its fast-growing operations and to optimize back-office functions. They all report to Al Berg, one of the financial partners in Marchon, who assumed the title of president and CEO one year ago. Berg continues to run the company together with Jeff White, co-president, and Larry Roth, vice president of sales.
One of Marchon's 3 new top executives is Rich Martin, former co-president of the Calvin Klein fashion house, who has been appointed as chief operating officer. New on the team is also Michael Blanconi, a former executive of Reebok and Toys'R'Us, who has become Marchon's executive vice president of supply chain management. Six months ago, the US company had brought in also a chief information officer, Jim McGrann, who had gained a lot of useful experience in the computer business.
Blanconi will play a particularly important role at Marchon, where he will seek to improve the integration among the production, sourcing and logistic processes, and to keep inventories down to a minimum, while ensuring that the right standards of quality and product availability will be maintained. He will be looking at sophisticated supply chain management systems such as SAP. This new function and the others have become necessary in view of the rising volumes being handled by the group, which should reach almost 8 million units this year, and of its growing number of direct sales subsidiaries around the world.
Marchon's strategy is based primarily on close cooperation with the brands it licenses and on customer service, rather than on controlling the production or any retail chains. Unlike the Italian majors, Marchon doesn't handle any serial production in-house, although it opened last September a large new 80,000-square-meter prototyping facility in Northern Italy to coordinate design for the whole group and relations with Italian contractors. For the moment, Italian third-party manufacturers satisfy about 40 percent of Marchon's worldwide requirements, particularly its more fashionable products. A similar quantity ? mostly titanium frames ? comes from Japan. The balance is sourced through Hong Kong.
Marchon's sales rose last year by about 20 percent, but the growth rate will probably slow down this year because of the softening US economy, while still taking the company up to a nice level of about $400 million in net revenues, higher than the level estimated by Carlo Pambianco and other analysts. Marchon will not provide a breakdown among its various brands, but industry estimates put its Calvin Klein line at an annual level of about $120 million. Sales of the Donna Karan and DKNY lines have probably risen to about $50 million a year since Marchon took over the license from Lantis Eyewear in 1999.
Marchon's newest strong licensed brand is Nike, whose shipments began only in the USA and Italy last year. It's being rolled out now throughout the world, with ophthalmic models available for the moment only in the USA and the UK.
The acquisition of the distribution in numerous countries over the past few years, starting with Canada in 1994, has contributed to the company's recent growth. North America is still the major market, accounting for about 55 percent of total sales, and Marchon remains the leading eyewear supplier in the USA with an estimated market share of 16 percent, up from 12 percent two years ago, according to a recent survey by Jobson Publishing. Safilo is next with 12 percent, and Luxottica is third with 11 percent.
Marchon is boosting its sales teams in many markets ? they are up to 48 reps in Italy now - with the goal of becoming one of the 3 major suppliers in each major country. It's already at that level in the UK. It's growing very fast also in France, Spain and in other parts of the world.