A French bankruptcy court pronounced last month the liquidation of Logo Eyewear's assets after another French company, Cémo, withdraw a takeover offer for some of its assets and between 14 and 34 of its 170-odd employees in France.
Acquired three years ago by Pierre Verrier, a former chief executive of Logo, Cémo had made its offer conditional on the acquisition of Logo's licensing contract for Tag Heuer eyewear from the Swiss watch brand's owner, LVMH. Tag Heuer didn't accept this condition, but it has failed to say who will take over the juicy license in the future.
With an annual production of more than 400,000 pairs at Logo's factory in the Jura region of France, Tag Heuer represented lately more than 90 percent of Logo's annual turnover of about €40 million, after the termination of other licensing deals. Another brand of LVMH, Fred, accounted for 3 percent of sales.
We could not determine yet who is going to have the Tag Heuer license. We know at least one potential successor, but we were told that nothing will probably happen until the liquidation process is over. As indicated at the end of the previous article on Safilo, there is also the possibility that LVMH will prefer to develop the Tag Heuer line of eyewear in-house.
Logo has been operating in the town of Morez for 120 years. It went through several owners, including Essilor, and it had some production in the Far East until recently. It was planning to launch other lines before it became insolvent in May. Local reports indicate that some of Logo's employees may want to form a cooperative.
LVMH stated that it could not be held responsible for Logo's demise, after 20 years of collaboration. Noting that its sales of Tag Heuer glasses last year were 37 percent lower than in 2011, LVMH blamed the management of the company. It said that the license had been extended until 2017 to give the company time to find new clients.
Logo had in fact found new licensees such as Rossignol, McLaren and Leica, as we reported earlier this year, but it was apparently too late. Many executives have left the company in the recent months. Others had left it previously because of the transfer of administrative, sales and marketing functions from Paris to the new owner's office near Lyon.
Observers feel that some of Logo's problems may be linked to the high cost of labor in France, which is said to be 30 percent higher than in Italy, although Logo employed more than 200 people in Indonesia and other parts of Asia as well.
In any case, the number of employees in the eyewear industry of the Jura region has fallen to only about 1,600 from about 10,000 in the 1970s and 4,500 in the 1980s. Many of the companies that are still surviving, including several high-end brands of designer eyewear, are relying on their own branded collections and on the manufacture of private label glasses for major French retailers. Those who continue to license well-known brand names are focusing on quality and the development of new products throughout the year.