Moulin International, the large Chinese eyewear manufacturer, has agreed to acquire a 25.1 percent interest in Metzler, Germany's second-largest eyewear company. The partial takeover, which is being implemented through an unspecified equity increase that will strengthen Metzler's balance sheet, is part of a wide-ranging strategic alliance in production and distribution that may set a precedent for the industry.
As part of the latest deal, Design Optical Group (DOG), a subsidiary of Metzler, has taken over the operations of MonOptic, a subsidiary of Moulin that was handling the distribution in Germany of some of Moulin's licensed brands ? Aigner, Guess?, Giordano, Speed and Mistral. The Metzler group will take over the distribution of these brands in Germany as well as Austria and Switzerland. Metzler may do so also at a later stage in the UK and other countries where it has its own sales subsidiary. For its part, Moulin will help boost sales of Metzler's own products in China and other countries.
On the manufacturing side, Moulin will gain access for its higher-end eyeframe models to Metzler's own production facility in the Czech Republic, which follows very high German standards, and transfer some of its technology and know-how to its own factories. Metzler has been contracting out the manufacturing of some of its own lower-end models to several factories in Asia, including those of Moulin. The German firm will now make use of Moulin's facilities more intensely, guaranteeing minimum orders of 1 million frames per year. It will continue, however, to use its Czech facilities for delicate processes such as galvanizing and coloring.
There will be no change in the management of Metzler, which remains under Ulrich Fischer, but Moulin will appoint a director on its board. Moulin doesn't have an automatic option on additional Metzler shares, at least for now. Metzler apparently had no financial problems that would have made Moulin's investment necessary. While its margins may have suffered somewhat from the competition of certain large Italian eyewear groups, Metzler still managed this year to raise its sales by 5 percent to almost 100 million DM (e 51m-$45m).
Metzler delivers about 1.2 million pieces annually. Quoted on the Hong Kong stock exchange, Moulin is much larger, with an annual production of about 13 million pieces at 3 plants in China, but it specializes on the low-to-medium segment of the market. In the 6 months ended last Sept. 30, Moulin's sales grew by 12 percent to HK$480.1 million (e69m-$62m), including a 29 percent sales increase in Europe to HK$65 million (e9m-$8m). The gross margin reached 56 percent, and the net profit increased by 9 percent to HK$135.9 million (e19.6m-$17.4m).