Italy-based Safilo Group has reported net sales for the financial year ended 31 December were Euro 1,047.0 million, down by Euro 194 million at constant currency compared to 2016.
According to the company, the reduction in sales was caused both by the change of the Gucci licence into a supply agreement, representing Euro 155 million (-12%), and by the implementation of the new Order-to-Cash IT system in the Padua Distribution Centre early in the year.
That event negatively affected deliveries, and while operationally recovered from mid-year, affected order taking and thus reduced sales and profit up to including the fourth quarter.
Exceptional external costs
In addition, it caused exceptional external costs of approximately Euro 4 million.
Dior collections experienced a decline after several years of extraordinarily strong growth. The total of all other licences, as well as the own core brands, grew single digits. The net sales of the going forward brand portfolio decreased by 3.9% at constant exchange rates.
In the fourth quarter of 2017, Safilo’s preliminary total net sales equalled Euro 249.2 million, contracting by Euro 53 million at constant currency compared to 2016.
Loss of Gucci accounted for Euro 44m
The net effect of exiting the Gucci licence and entering the supply agreement accounted for Euro 44 million of the decrease, while net sales of the going
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