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Before the COVID-19 pandemic hit global eyewear sales in 2020, Safilo Group was already facing challenges in the industry’s shifting competitive landscape. Despite industry-wide growth reflecting increasing consumer concern for eye health on the heels of wider health and wellness trends, boosting overall demand for both spectacles and sunglasses, Safilo experienced significant sales declines in many of its top markets.
Not only did the company cede market share to growing digital native vertical brands (DNVBs) like Warby Parker, but it also lost entire brands from its portfolio, as luxury groups like Kering SA and LVMH Moët Hennessy Louis Vuitton increasingly terminated licence deals and moved their brands’ eyewear production in-house instead.
To combat its mounting challenges and attempt to not only stabilise but also grow sales again, Safilo announced a new business plan for the years 2020-2024 in December 2019. Having become even more imperative because of the effects of the pandemic, its two key objectives are:
• To grow sales by focusing on core brands, products and market opportunities – especially its proprietary brands, prescription frames business, and via emerging markets like China – through a new digital transformation strategy encompassing the company’s digital marketing channels, B2B ecosystem, and D2C e-commerce sites.
• To grow profits by downsizing its industrial footprint amid decreased production.
While Safilo did see a significant drop in global sales in the first half of 2020 due to lockdowns intended to curb the spread of COVID-19, the company began to see sales recover in Q3, especially in China.
At the same time, the company began to execute its strategic plans while also helping to combat the pandemic. Throughout 2020, Safilo retooled its plants to make face shields and safety goggles to equip frontline healthcare workers, launched a new B2B e-commerce system, acquired a majority stake in US-based D2C brand Privé Revaux, and downsized its industrial footprint by selling an Italian production plant, among other moves.
As Safilo continues to execute on its business plan in 2021, however, the continued presence of the pandemic means that the company and its wholesale customers will still have to comply with government mandates that could continue to impact sales across channels and markets.
Meanwhile, the company will also have to contend with several larger trends already impacting how consumers work, shop, and live in 2021 and beyond, including the Top 10 Global Consumer Trends of 2021. With Safilo continuing to lose some of its key licenses, as it will for LVMH’s Fendi, Givenchy, and Dior, now its top-selling brand, throughout the year, responding effectively to such trends will become increasingly important as it aims to develop its remaining brands through digital marketing and sales channels.
To learn more about Safilo Group SpA, its competitive environment, and its prospects amid the pandemic and beyond, please see Safilo’s Company Profile.