PADUA, Italy — Italian eyewear maker Safilo booked a charge of €227.1 million ($252 million) in its half-year net results, due to a goodwill writedown after France's LVMH decided to end its Dior license after 2020, it said on Friday.
Safilo said earlier this month it would lose its license at the end of 2020 to use the Dior brand, which accounted for 14 percent of sales in the first half and which will likely go instead to LVMH's eyewear partner Marcolin.
It is the second out of five lucrative LVMH licenses lost by Safilo, which retains licenses to brands including Max Mara, Jimmy Choo and Hugo Boss, and comes after the French luxury group bought a 10% stake Marcolin as part of a partnership.
Safilo's half-year net loss reached €273.2 million, but the company made a net profit of €0.6 million without the write-down.
Second-quarter sales rose 9.2 percent on a comparable basis and stood at €263.4 million on a reported basis, under accounting standard IFRS 16 which was introduced this year.
LVMH's move to a partnership with Marcolin follows in the footsteps of peer Kering, which set up its own eyewear business, turning a €350 million Gucci license with Safilo into a four-year production deal with the company, for better distribution control and rich profit margins.
Adding more pressure on Safilo, EssilorLuxottica said on Wednesday it would buy Dutch opticians group GrandVision , taking control of thousands of stores where it sells spectacles and lenses, though the deal is likely to face scrutiny by competition regulators.
By Silvia Recchimuzzi; Editor: David Holmes.