MILAN — Is the eyewear industry further evolving its modus operandi?
On Thursday, Safilo Group revealed it had signed a perpetual license agreement with Authentic Brands Group for David Beckham Eyewear. This replaces the previous contract that was due to expire at the end of 2030 and marks yet another approach to the production and distribution of branded eyewear. Two other such examples come to mind: Marcolin’s perpetual license with Tom Ford, signed in April last year, and EssilorLuxottica’s perpetual license with Eastman Kodak Company, inked in July 2023.
They could also be seen as a response to the eyewear industry’s drastic changes over the past few years, with the merger of Essilor and Luxottica, and the establishment of Kering Eyewear and Thélios, which have forced groups like Safilo and Marcolin to revisit their strategies.
Safilo’s chief executive officer Angelo Trocchia described the agreement with Beckham as “another milestone within our strategy. By transforming David Beckham into a perpetual license, we secure another cornerstone of our portfolio with one of the most successful eyewear brands of recent years.”
The collections have become “a top male brand in the global premium segment and a great force in Safilo’s digital universe thanks to David’s global audience. We will continue to work together to further maximize the brand awareness and its global penetration.”
The first Eyewear by David Beckham collection was unveiled in 2020, a new eyewear brand designed by the iconic athlete in collaboration with Safilo and comprising sunglasses and optical frames.
Asked about the reasoning behind the new development, Trocchia told WWD that he hoped perpetual licensing agreements would become “more frequent” in the eyewear industry, describing them as “certainly important strategic projects,” given the current and future strength of certain brands.
“Perpetual agreements allow to consolidate important assets in a permanent way, reducing the business risk of renewing a license before it expires and allowing to plan wide-ranging and comprehensive development projects.”
Trocchia said, “Eyewear by David Beckham is a young brand in our industry, which Safilo launched globally four years ago, and grown on a yearly bases at very high rates, becoming in a very short time an essential point of reference, a leading brand in the premium segment of the menswear eyewear at the global level, with a very strong connotation and a strong digital appeal.” He singled out an “excellent level of collaboration with and confidence in the fashion house, and a brand that is in a strong growth trajectory” as the “right ingredients for this kind of agreement.”
Asked about potential changes in terms of organization, distribution or balance with the other brands produced by Safilo, Trocchia said the business model and the organization will not change, as the company will continue to manage the whole chain, from design to production and global distribution.
“For the creative process, the collaboration with David Beckham will be fundamental, as it has always been since the beginning of our partnership. Our portfolio comprises brands that cover all segments, to respond to the different needs of clients and consumers. The needle won’t move. We will continue to enhance the DNA of each brand, maximizing the visibility and diffusion with reference targets in a complementary way.”
Since its launch, the brand has amassed a global following, Trocchia said. The designs are marked by the distinctive “Talisman” detail inspired by the wings of a bird, “symbolizing power, protection and freedom.”
Eyewear by David Beckham produced by Safilo.
courtesy image
Luca Solca, senior analyst at Bernstein, believes “the trend to ink perpetual licenses is really a response from the eyewear industry to the concerns of the market for a continuous process of in-housing licenses by the luxury industry. Allow me to say this is a partial response because there is a great difference in the profile and the importance of the brands that exit the licenses (bigger) and those that enter into them (smaller).”
Oriana Cardani, senior equity analyst at the Equity Research Department of Intesa Sanpaolo, admitted that “these kinds of operations are emerging in the sector,” but saw them as “company-specific.”
“The trend is to extend the length of licenses, but this kind of agreement is very binding. Companies need to pay for the transformation of a license into a perpetuity agreement, and this investment makes sense if the license is important in terms of size and potential, so it’s a defensive tactic to secure future growth. On the other side, a brand is willing to lose control with this kind of agreement, so these are two necessary conditions, hence the case-by-case scenario. Safilo’s operation in itself has a strategic value and I see it as a positive move.”
Safilo shares were not impacted by the news, slightly up during the day and closing down 0.34 percent at 1.16 euros on Thursday, which was attributed by analysts to a general sluggish market and to a wait-and-see approach, given the costs associated with the agreement.
Financial details were not provided by Safilo, but when Marcolin secured the perpetual license for Tom Ford eyewear with The Estée Lauder Cos., it was revealed that the American beauty group in 2022 acquired the Tom Ford business for about $2.3 billion, net of a $250 million payment to Lauder at closing from Marcolin through available cash. Upon the closing of the deal, Marcolin revealed on its website that it had raised a capital increase of 75 million euros.
Backstage at Tom Ford fall 2024 at Milan Fashion Week.
Delphine Achard/WWD
Marcolin had been manufacturing and distributing Tom Ford’s eyewear collections since 2005. (The Ermenegildo Zegna Group acquired the operations of the Tom Ford fashion business.)
EssilorLuxottica’s deal with Kodak was an evolution of the multiyear licensing agreement with the company with the intent to further develop the brand in all its categories. At the time of the announcement, deputy CEO of EssilorLuxottica Paul du Saillant said the “substantial and permanent addition” to the group’s brand portfolio would create new opportunities “leveraging our innovation capabilities and distribution network.” He said that “long-term agreements like this one pave the way for our company’s growth for many years to come.”
Last year, Safilo’s sales totaled 1.02 billion euros, down 4.8 percent compared with 1.08 billion euros in 2022.
Safilo’s owned brands have grown to represent around 44 percent of sales. The Beckham brand’s growth since the launch has often been trumpeted by Trocchia in trading updates, becoming one of its core brands, singled out for its double-digit performance. In addition to proprietary brands including Smith, Carrera and Polaroid, Safilo produces eyewear collections under licensing agreements for brands from Carolina Herrera and Isabel Marant, to Jimmy Choo, Tommy Hilfiger, Marc Jacobs, Missoni and Moschino, among others.
Authentic Brands Group, a global brand owner, development and entertainment company, in 2022 entered into a strategic partnership with the British footballer to co-own and manage Beckham’s global brand. He joined ABG’s growing entertainment roster that includes such athletes and iconic sports brands as Muhammad Ali, Shaquille O’Neal and Reebok.
Italy’s second-largest eyewear manufacturer, Safilo had to grapple with Kering’s decision in 2014 to produce eyewear internally for most of the brands in its stable, and Gucci, in particular, a longtime Safilo licensee. Thélios, the venture first created between LVMH Moët Hennessy Louis Vuitton and Marcolin, and now solely under the French group’s umbrella, took control of former Safilo licenses Dior and Fendi, among others.
Speculation has resurfaced about leading private equity firm PAI Partners looking to exit Marcolin. This would not be surprising since PAI Partners acquired a majority stake in Marcolin in 2012 — way beyond a fund’s usual exit time frame — and the eyewear company, led by CEO Fabrizio Curci, has been logging growing profitability and sales. Sources believe the perpetual license could be a significant additional asset for a potential buyer, given the success of Tom Ford’s eyewear.
Neither PAI Partners nor Marcolin is commenting on the rumors, which include EssilorLuxottica and Kering said to be eyeing Marcolin.
Kering Eyewear, led by president and CEO Roberto Vedovotto, last year reached a milestone 1.5 billion euros in sales and is marking the 10th anniversary of the company this year.
Marcolin produces eyewear collections for brands ranging from Bally, Moncler, Zegna and Max Mara to Tod’s, Pucci, Guess, Timberland and Adidas Original, to name a few. Proprietary brands include Web Eyewear and the Ic! Berlin brand, a deal inked in November that saw Marcolin integrating Ic! Berlin’s around 140 employees.
EssilorLuxottica in 2022 reported consolidated revenues of 24.5 billion euros. While it does include proprietary brands, from Ray-Ban to Oakley and Persol, the group also has a strong portfolio of licensed brands that range from Michael Kors, Giorgio Armani and Brunello Cucinelli to Burberry, Chanel, Prada, Ralph Lauren, Tory Burch and Versace, among others.
