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There will be a new recapitalization within Safilo. Currently the company has a total net debt of 590 million euros. What’s more serious, Safilo has still suffered falling preliminary third-quarter results that both the turnover and core profit were much lower than the numbers of the same period last year. The core profit of this third-quarter was only 3.5 million, compared to 16.7 million a year ago. In addition, orders for the first two weeks of October suffered a 12.5% decrease compared with the same period of the last year. 

During the conference call with analysts, Chief Executive of Safilo Roberto Vedovotto also confessed that the operating performance of the group was very weak in October. Safilo has been a great victim of the global economic downturn. The sales of the company have greatly decreased during the last year. The firm had been long as the world’s second largest eye wear maker. But now, Safilo needs a large funds inflow in order to guarantee its survival. 

Currently, Safilo Chairman Vittorio Tabacchi’s family owns about 40% stake of the company. After the capital reconstruction, this number will be reduced to only 10%. The big buyer is Hal Investments, which is a Dutch shareholder. Hal Investments mainly focus on optical retail chain operators such as Pearle Europe and Grand Vision. 

Hal Investments only holds 2% of Safilo but its share will reach 49.99% in the near future. Hal is the main player that it will first buy Safilo stock for 13 million euros, which triggers a further investment of 250 million euros from Hal, Banca IMI and UniCredit. Moreover, Hal will buy Safilo’s non-core and loss-making retail chains in Spain, Australia and China for about 20 million euros. As a result, Safilo will receive a total of 283 million euro funds inflow. And it is said that the company will use about 185 million to repay its debt. 

After such a reconstruction, Safilo itself is expected to concentrate on production and its licenses, while Hal would focus on distribution.