Luisa Delgado.

PADOVA, Italy—Luisa Delgado, CEO of Safilo Group S.p.A. (SFLG.MI), along with senior executives of the company, presented a detailed strategic plan to the investment community here earlier this week. The plan, which projects Safilo Group net sales growth of 6 percent year on year to reach between €1.6 billion to €1.7 billion by the year 2020 and a doubling of fiscal 2014’s EBIDTA, was approved by the Safilo board of directors on March 16.

In her comments, Delgado said, “Safilo is a strong business, enjoys a great craftsmanship heritage dating back to 1878, has worldwide brands and positions in an industry offering significant growth potential and is supported by a healthy balance sheet able to fund investment in its future. Our people are highly committed, embodying and promoting a strong Safilo culture of historical leading-edge resilience and agility which is a real asset to the group.

“The 2020 Strategic Plan will allow us to realize our potential. We are already growing our top line, but we can grow it faster by enhanced focus on our brand and commercial strategies. There are significant internal structural redesigns that we are undertaking to boost supply chain, technology, go-to-market and cost efficiencies to drive a positive step-change in profitability.”

She added, “Safilo’s market offers the group excellent opportunity for sustainable, profitable growth. The board and the new senior management team have developed the 2020 Strategic Plan to position and drive Safilo to take advantage of this opportunity to the benefit of the group, its customers and employees and to materially enhance profitability and shareholder value.”

The plan noted, “The world eyewear market is an attractive industry, in which Safilo is well positioned as the second largest operator, with distribution in 130 countries, manufacturing approximately 35 million frames every year and achieving revenues in 2014 of just under €1.2 billion.”

Since her appointment as CEO in October 2013, Delgado, together with the board, has looked to further develop the group’s commercial strategy, geographic footprint, license portfolio and design and manufacturing capabilities to deliver sustained growth and accelerated profitability in the mid and long term.

The actions taken during 2014 laid the foundation of the new strategic plan and include, the company said: 1) a new Go-to-Market strategy based on seven regions and five global channels, 2) a new brand building organization, 3) a new Product Creation organization to enable design and engineering, powered by innovation, to work seamlessly for breakthrough improvements and, 4) a new Product Design organization setting a global network of Design Studios to maximize creative inspiration from trend setting cities in the world.

The company noted that ”its senior management team has also been materially strengthened, with a significant and diverse number of new leaders, with new skills and experience, brought in to complement and build on the deep industry experience and knowledge of new appointments made from within the group.”

Safilo will undertake a balance across consumer market segments, between proprietary and licensed brands, within licensed brands and across geographies and channels to underpin sustainable growth. Objectives will include achieving the appropriate balance between the five identified consumer market segments (Atelier, Fashion Luxury, Contemporary Fashion & Lifestyle, Mass/Cool, Sport & Outdoor) in the eyewear branded sector.

This also includes a more sustainable balance between proprietary and licensed brands, by increasing the share of proprietary brands to approximately 40 percent of total business (from 25 percent in 2014). This includes doubling proprietary brand sales by 2020 based on strong brand platforms and clear consumer targets for each of Safilo’s core proprietary brands, Delgado said, noting that progress on this front has already begun in 2014.

The company also envisions further organic growth of licensed brands, together with the pending agreement with Kering for the conversion of the Gucci license into a four-year strategic product partnership agreement, as previously reported, which takes place in 2017. Other licenses in Safilo’s portfolio include Dior, Fendi, Bottega Veneta, Celine, Marc Jacobs, Boss and others.

To sustain its plan, Safilo said it expects to invest about €260 million to €280 million dedicated to modernizing its product supply and logistics network and its technology. Safilo also talked about an advanced IT system project, called “Eye-Way,” which will allow for significant modernization and standardization of work processes which will allow cost savings. Along with investment in emerging markets, Safilo said it will see “stronger channel and customer differentiation” approaches in such markets as North America.

VM reported on Delgado and the firm’s approach, prior to the detailing of the strategic 2020 plan, in VM’s January 2015 issue in an exclusive interview.