Marcolin's closure of its French subsidiary Cébé, which took effect from the end of last year, had an immediate effect on its results, which showed a doubling in its profit for the 1st quarter of 2008. They had also a major effect on the sales of a couple of French competitors in the area of snow goggles and snow helmets, which were taken out of Cébé's product range for Fall/Winter 2008/09, while keeping its sunglass offerings.
Sunglasses have been highly demanded by ski retailers because of sunny and warm weather in the Alps, benefiting all the brands in the sector. Aside from this, while pre-orders for the Fall/Winter season have not yet been completed, Bollé is anticipating a possible doubling in its sell-in for goggles on the French and Italian markets. Its orders for helmets have already quadrupled in the second year that it is offering this type of product.
Another French company, Julbo, is predicting triple the former volume for its deliveries of ski goggles on the domestic market, aided by the fact that one of its subcontractors bought five of the molds from Cébé's collection.
For Marcolin, Cébé had become a serious drain on its profits. The charges related to the closure of its manufacturing, distribution and sales facilities, with 100 layoffs out of Cébé's 109-strong staff, were accounted for on the group's 2007 balance sheet, making 2008 a fresh start with Cébé out of the way and with the loss of the Dolce & Gabbana license a thing of the past.
The Cébé brand itself remains the property of Marcolin, which says that attempts to find a buyer gave disappointing results. Cébé sunglasses and prescription frames will consequently be developed, produced and distributed by Marcolin, which showed them on a wall in its MIDO stand. The discontinued sports goggles represented less than 5 percent of the Italian group's total sales.
Besides the reorganization of the sports business, the sales results for Marcolin's first quarter also reflect a certain slowdown of the economy, particularly on the domestic market and the USA, which account for 40 percent of total sales. The group's turnover nonetheless grew by 4.4 percent to €56 million, or by 7.8 percent excluding the currency effect. Domestic sales were down by 11 percent compared with the first quarter of 2007 and U.S. sales were off by 3.9 percent. The rest of Europe performed well, with 6.4 percent growth, and the rest of the world even better, up by 33.1 percent.
On the other hand, profitability improved considerably. According to preliminary figures, operating earnings before amortization and depreciation (EBITDA) were up by 36 percent to 10.8 million, yielding a19.2 percent return on sales. Operating profit before interest and tax (EBIT) grew by 45.7 percent to €8.6 million, equivalent to 15.3 percent of sales. Net profit was up by 102 percent to €4.8 million, making an 8.5 percent return on sales. The group's debt stood at €38.9 million, €2.7 million higher than for the 1st quarter of 2007, but roughly the same level as at the end of 2007.
According to Massimo Saracchi, the group's new 49-year-old chief executive and general manager, who came in from Procter & Gamble last December when Antonio Bortuzzo went over to Allison, Marcolin should be able to make a profit in 2008, after three consecutive years in the red.