Marcolin signed a five-year license agreement, renewable for another five, with Dsquared2. The contract was signed with Dean and Dan Caten, the designers of the Italian brand, and its licensor, Staff International. The deal marks Dsquared2's diversification into eyewear. A collection of men's and women's sunglasses is scheduled in the first half of 2009 followed by a range of prescription frames.
Distribution will be limited to premium retailers and department stores, as well as to Dsquared2's shops. The collection is expected to eventually generate annual sales of about €20 million for Marcolin. The company is actively seeking new international licenses to sustain sales growth and to improve economies of scale which boosted its 2007 results.
Marcolin increased full-year sales by 15.8 percent to €182.3 million, largely thanks to gains in Europe, excluding Italy and the Middle East. At constant exchange rates, the rise would have been 18.3 percent. Sales rose by 0.5 percent to €37.2 million in Italy, and increased by 21.0 percent to €73.9 million in the rest of Europe. They were up by 13.7 percent to €40.0 million in the USA and soared by 29.2 percent to €31.2 million in the rest of the world. Turnover jumped 70.6 percent in France, rose by 51.8 percent in Germany and increased by 28.2 percent in Spain. In the Middle East revenues were up by 58.0 percent and rose by 42.0 percent in Eastern Europe.
The group also managed to improve the profitability of its sunglass and prescription frame activities, which total about 90 percent of sales. Group operating profit before amortization and depreciation (EBITDA) doubled to €10.6 million from €5.3 million the previous year, with sunglasses and optical frames contributing €15.3 million compared with €9.4 million previously. The French sports eyewear unit Cébé continued to drag down the group's results, with an EBITDA loss widening to €4.7 million from €4.1 million.
Marcolin cut its consolidated EBIT loss to €0.1 million from €6.7 million and its net loss to €6.9 million from €13.3 million. Cébé negatively impacted its profit and loss account by €9.2 million, of which €3.6 million came from restructuring costs and €5.6 million from the operating loss.
Meanwhile, the core business swung into the black, booking a €2.4 million net profit against a €2.5 million loss the previous year. The company also posted a positive operating cash flow of €1.1 million compared with a negative €10.0 million in 2006. But the net debt increased to €36.2 million at the end of 2007 from €32.1 million due to investments, and the company decided to omit the payment of a dividend. Excluding Cébé, net debt stood at €32.8 million.
Marcolin is currently phasing out the production of ski goggles and closing down a logistics unit at Cébé and expects group sales and profitability to continue improving this year.