Safilo buys Blenders in move to lift digital sales

MILAN: Italy’s Safilo Group SpA has agreed to buy 70% of Blenders Eyewear, looking to boost digital sales through a deal it said valued the US surf and ski sunglasses brand at $90 million.

Founded in San Diego in 2012 by surf instructor Chase Fisher, who will remain as chief executive officer and 30% shareholder, Blenders generates 95% of its turnover online and only recently opened its first bricksand-mortar store in San Diego.

E-commerce currently accounts for only 3% of Safilo’s total revenue, mostly from its existing US brand Smith.

“With the deal we intend to accelerate Safilo’s digital growth by learning from the great capabilities of the founder of this native-digital brand,” Safilo CEO Angelo Trocchia told Reuters on Monday.

“The deal is expected to close in January, boosting group earnings from next year,’’ he added.

Blenders’ sales are expected to reach $42 million this year, up about 40% from 2018, and Mediobanca Securities analysts estimated the acquisition would add 4% to Safilo’s revenue.

Safilo has been struggling to lift sales and profit after moves by luxury groups including Kering SA and LVMH Moet Hennessy Louis Vuitton SA to end licensing accords for brands such as Gucci and Dior, taking production in-house.

Monday’s deal strengthens Safilo’s brand portfolio, which is less exposed to the risks of the licensing business, as it contends with increasingly stiff competition.

Domestic rival Luxottica Group SpA last year closed a merger with the world’s biggest lens manufacturer, Essilor International SA, to create eyewear giant EssilorLuxottica.

Dior owner LVMH has established a joint venture with Marcolin, another domestic competitor, to design and manufacture eyewear for its Celine brand, formerly licensed to Safilo.

Kering, meanwhile, set up its own eyewear business to better control distribution and pocket rich profit margins and turned the Gucci licence with Safilo into a production deal.

“It’s an interesting growth initiative, but in our opinion the main theme for the group is to manage the restructuring of its Italian manufacturing capacity (after the loss of the LVMH licences),” broker Equita wrote in a note.

The acquisition will be financed through available cash and credit facilities, including a €30 million ($33.1 million)loan from Safilo’s top investor, Dutch investment fund HAL Holding NV.