MILAN — Italy’s eyewear industry appears headed for a strong year, helped by robust economic growth in key export markets like the U.S. and China, low oil prices, a strengthening dollar and a hoped-for pickup in domestic demand.
These were the key messages set out by Italy’s Optical Goods Manufacturers Association (ANFAO) on the eve of this year’s MIDO international eyewear trade fair in Milan.
At the MIDO presentation conference on Feb. 27, Cirillo Marcolin, president of both ANFAO and MIDO, said that Italy’s eyewear industry ended 2014 with total production at 3.18 billion euros, or $3.56 billion at current exchange, up 9.4 percent from 2013 and marking the fifth consecutive year of growth. Exports, which are worth some 90 percent of total Italian production, were up — also for the fifth year in a row — almost 12 percent, reaching 3.1 billion euros, or $3.5 billion, a new record.
Another important boost to the industry’s prospects could come from the eventual passage of important free-trade deals like the Transatlantic Trade and Investment Partnership between the U.S. and the EU, according to Carlo Calenda, Italy’s vice minister for economic affairs, who also spoke at the MIDO conference. Calenda pointed out that the potential for Italian eyewear makers in the U.S. is still “enormous” and that the presence of Italian firms has so far mostly been focused on the coasts — “just the tip of the iceberg.”
However, while the picture looks promising for the bigger fish, smaller firms still face the challenges of a tight domestic market and competition. And they are being squeezed on other fronts, too: the smaller players still have difficulty getting access to credit and Italy’s heavy taxes are a burden, Marcolin told WWD.
Talks with some of the industry’s leading players confirmed much of what Marcolin and Calenda said.
In an interview with WWD, U.S.-based Marchon Eyewear Inc. president and chief executive Claudio Gottardi confirmed he sees strong growth in the optical market in the U.S. over the coming year, helped by strong economic expansion and lower oil prices, which will increase consumers’ spending power. Add to this mix the dollar’s strengthening versus the euro, and this should boost European-based producers’ sales.
Some markets, however, will remain slow.
“The biggest challenge [in 2015] is in the BRIC countries,” Gottardi said. “Almost everybody invested heavily in these markets expecting them to be growth drivers over the next 10 years. But Russia, India and China are slowing and the U.S. — which seemed to be slowing — is growing by 2 to 3 percent per year, which corresponds to 8 percent growth in China. Now managers — in all sectors, not just eyewear — will have to reconsider their business development plans.”
Business plans aren’t only about sales, they are also about production and Marchon — which produces under license for brands including Chloé, Ferragamo and Valentino — is continuing to invest in expanding production in high-end lines in Italy, where it has its only wholly-owned eyewear manufacturing facility. “Just a few days ago, we signed a multi-million-euro purchase of machinery that will boost production there. Today we produce about 15 percent of total volume in Italy, but over the next few years we plan to raise that to 30 percent.”
In an interview, Safilo Group SpA ceo Luisa Delgado said 2015 is “full of opportunity” as the luxury world is diversifying into new market segments, creating new possibilities, as opportunities grow in fast fashion. The company produces collections under license including Dior, Saint Laurent and Tommy Hilfiger, among others, and its own brands including Polaroid.
One expected key driver is children’s optical. At MIDO the company launched its “Kids by Safilo” eyewear collection, aimed at children up to eight years old. At the official launch on March 1, the company said the collection was developed with the collaboration of the World Society of Paediatric Ophthalmology and Strabismus.
“This is a market that still hasn’t been addressed and it needs to be met,” Delgado said. “The numbers say it all: there are some 1.6 billion children in the world with vision problems but [relatively] few have glasses.”
At MIDO, many exhibitors pointed to a more accessorized future for eyewear. Delgado said Safilo is also in line with this trend with, for example, its “versatile” Carrera family with changeable covers. “With this [cover] the glasses become ever more an accessory,” Delgado said, adding that this trend will likely accelerate as some of its licensors — like Max Mara — add eyewear in their catwalk shows.
Delgado also said that she sees space in the eyewear market for new fashion brands seeking a finished look. “Glasses, as in Fendi’s case, complete the total look. So here, too, we see a high growth potential.”
Maurizio Marcolin, style and licensing officer of Marcolin SpA, was likewise upbeat about the sector’s outlook. “Regarding our company, we don’t see any slowdown. On the contrary, we keep growing strongly in all markets,” he said. The firm — whose licensed brands include Diesel, Kenneth Cole and Tom Ford — is seeing double-digit sales growth with some of its licenses. As with much of the industry, export markets are seen as sales drivers.
“The launch of the new [Ermenegildo] Zegna line allows us to grow and develop our exports a lot,” Marcolin said. Zegna is expected to do particularly well in Asian markets, where the brand has been present a long time, Marcolin pointed out. In the current year, Marcolin said the company will also focus energy on developing the U.S., where — through Viva International, which it acquired in December 2013 — it now has a strong presence in high- and medium-high-end product ranges.
Meanwhile, Luxottica SpA offered an upbeat outlook in its full-year results, published March 2, the last day of the MIDO fair. In a statement, co-ceos Massimo Vian and Adil Mehboob-Khan said: “In 2015, we expect solid revenue growth and profitability to grow twice that of sales, as it has for the past five years, and we see continued growth across businesses in developed and new markets, with bright spots including Ray-Ban, Oakley and Sunglass Hut.”
On the product side, three main trends appeared to dominate at MIDO: oversize; round, polished acetates in sophisticated hues, as well as cat-eyes and “kitten” frames.
At its stand, Marcolin showcased, among others, its new Zegna Couture collection, characterized by complex combinations of materials like temples made of horn fused with wood on large frames. Also making their debut were new Emilio Pucci collections.
“Pucci wanted to reinterpret its historic archives, so we interpreted it with a modern twist,” Marcolin said, adding that the new collection also offers women’s “oversize” glasses that are “very glamour, very diva.”
The company also introduced new frames for Tom Ford, with designs that are “vintage but continuously reinterpreted, for example with spotted tortoiseshell and more rounded-out shapes.”
Among the lines Luxottica spotlighted were new Ray-Ban and Prada collections. For spring 2016, Ray-Ban gets a bit of Fifties inspiration with round acetate frames, contemporized with flashy, colored lenses. The new “Prada Row” sunglasses collection has the same shapes as those seen on the catwalks but uses materials other than leather for the frames, like ebony and walnut, mounted on acetate temples.
Marchon launched the new “Etro by Marchon” men’s collection, characterized by clean lines and a wayfarer shape with an acetate frontal entirely covered by needlecord velvet in dark colors.
In general terms, at its stand, Safilo rolled out collections inspired by Fifties-style large or small cat-eye and butterfly silhouettes; retro-inspired shapes ,and squared silhouettes evoking the Sixties. Among the many collections presented, Max Mara’s new “Floral Bloom” line is inspired by the prints characterizing the brand’s spring runway.
MIDO organizers took pride in pointing out that there were about 150 new exhibitors this year. One of those was ClearVision Optical of the U.S. The Hauppauge, N.Y.-based firm — which produces glasses for brands including BCBG Max Azria and Cole Haan — launched Aspire, a new line of tech-heavy sun and optical frames. The design focus for Aspire, ClearVision executive vice president Peter Friedfeld said, is “very clean, modern, not too futuristic, very comfortable.”
“Historically, fashion eyewear trends run in about eight-year cycles and now we’re in a transition period,” he added. “Recently the focus was on plastic in many colors. Now we’re at a point in the cycle where we need to move to new materials, and our proprietary SDN 4 allows for any shape with frames that are 75 percent lighter than traditional plastic frames.”
Friedfeld noted that SDN 4 allows Aspire to move from prototyping to retailing product in as little as 50 days — a strategic advantage in an industry that traditionally struggles to keep up with the fast-pace of fashion. The brand isn’t yet available outside the U.S., although the company is in the process of setting up European distribution from the U.K. and Asian distribution from South Korea.
Friedfeld said his product is well-suited for independent retailers who are hungry for fresh, unique products that appeal to younger buyers and are not found in the big, brand-heavy chains.
“We’re seeing this idea of de-branding, especially among millennials. It’s not so much what someone designs for you but what works for you,” Friedfeld pointed out.
Drawing some of the biggest crowds at MIDO were hip stands with thumping music and casually cool staff, like Italia Independent, where the focus was on the new Eyeye lineup with frames that will retail for just under 80 euros, or $90. Again, the theme is eyewear-as-accessory: at this price point, cost is no longer a barrier to eyewear becoming a true accessory, said Italia Independent ceo Andrea Tessitore. The company also revealed, for the Italian market, a “package” that includes, among other features, frames complete with Kodak lenses (provided by Essilor) at 98 euros, or $110, for ordinary glasses and for 138 euros, or $154, for shades. Tessitore said the company was “aiming for a huge, potential and untapped market.” The line is designed and engineered in Italy and manufactured in China. “We want to create global fast-fashion in eyewear with this project,” Tessitore said, adding that there will be new Eyeye collections every six months.