The Safilo Group SpA holds the distinction of being the world’s second biggest eyeglass frame maker climbed to its highest position in over seven weeks when the group announced that it anticipated significant growth in its dividends. The growth which Safilo registered was almost 16.8% and it grew by 34 cents, the stocks closed up at 10.8% at 2.23 euros in Milan. The fresh increase in the stocks is the highest since last month and with this increase the total market worth of the group stands at about 636 million euros or $943 million. Head of equities with Centrobanca in Milan Pio De Gregorio said that such levels of the stock are good-looking in the medium term especially for luxury items and the supplementary demand coming from Asia is a significant balancing element for the sluggish US and European demands.

Claudio Gottardi, the Co-Chief Executive Officer of the group during her interview in Milan expressed that the company wants to increase its dividends by as much as 36% which was also the company’s net profit increase last year. The Safilo group is improving the margins by reorganizing its methods of producing eyewear; the group is also focusing on the expansion of its retail activities by acquisitions and also having its own stores. The Co-Chief Executive further added that the company is waiting for the final figures and he also added that the group will be capable of presenting a significant raise for the current year’s dividend. Claudio Gottardi further added that the increase can be even a bit higher than the percentage growth in net income. The Co-CEO further added that that company expected flat sales for itself in the US for the current year. Sales for the Safilo group in Spain and Italy can decline but sales in the other European nations either improved or remained stable.

The net income for the Padua Italy based group increased by 36% to 51 million euros from 37.5 million euros in 2007. The company recorded revenue of 1.19 billion euros from its earlier 1.12 billion euros in 2006. The group also told that income before interest, taxes, depreciation and amortization can rise to 18% of the sales for 2008 which will be an increase from 15% recorded last year. Safilo and its competitor company Luxottica Group SpA are cashing in on demand for luxury items through signing agreements so that they can make eyeglass frames under license. For the Safilo group its net income comes from accords signed with companies like Gucci Group NV, Giorgio Armani SpA and LVMH Moet Hennessy Louis Vuitton SA.

The Safilo is also putting in investments in the brands owned by the group itself such as Carrera sunglasses. The group will be opening a factory in China in the current year and there will be old as well as new stores opened in Shanghai, Beijing and Hong Kong. However the retail expansion of the group will be done with its brand called Solstice sunglass.

Tags: European Economy News //