The Safilo Group announced that its important licensing agreement with the French fashion house of Christian Dior has been renewed until Dec. 31, 2020, but said that it will terminate the Céline license at the end of 2017, after extending it for one year. Céline was due to expire at the end of 2016 and Dior at the end of next year.
Céline, a brand that joined Safilo's portfolio of licenses in 2012, currently represents slightly more than 3 percent of the group's revenues, with sales concentrated in Europe and North America. Safilo has already designed and approved all the Céline collections for 2017.
Dior, a much older license that came with Safilo's acquisition of the former Carrera Optyl in 1996, represents slightly less than 20 percent of the group's revenues. The group disclosed that the terms of the new agreement are “substantially” in line with the previous contract and in “some areas offer better protection” to Safilo.
Controlled by the family of Bernard Arnault, Christian Dior is the major shareholder of the LVMH group. Céline is one of the fastest-growing fashion brands of LVMH. It has been part of the group since 1987.
Regarding the unusually long renewal period of 14 years for Dior, Safilo noted that there is no standard duration for license contracts in the industry, which generally vary from to two to ten years, or more.
Still, the termination of the Céline license and the short duration of the new Dior contract led an analyst at Mediobance to speculate about a possible decision by LVMH to bring the eyewear of some or all of its brands in-house, following the same strategy of Kering.
This would be a major blow for Safilo, whose licenses with LVMH generate annual sales of around €350 million, including €200 million with Dior. Its other contracts with LVMH are due to expire in 2021 with Givenchy, in 2022 with Fendi and in 2024 with Marc Jacobs.