“We want to be stronger with our core brands; just below 25%, we want them to be 45% by 2020.” -Henri Blomqvist
Henri Blomqvist, CEO of Safilo North America, as of August 1, 2016, is a member of the Safilo Group Executive Committee and previously served three years as chief commercial officer of Safilo Group.
JOHN SAILER: What makes Safilo unique?
HENRI BLOMQVIST: Safilo is the oldest company manufacturing frames on a continuous basis since 1878. Incorporated in 1934, with product at the heart, we have a very strong portfolio of brands, our own core brands, Carrera and Polaroid, along with a super strong licensed brand portfolio which includes Dior, Fendi, Hugo Boss, Kate Spade New York and more.
We have an ambition of being the leading eyewear creator in the world. A few months ago we announced that we were investing â‚¬63 million into our manufacturing capacity, and we have been investing in Product Creation heavily during the past two years. Our intention is to bring product in-house to manufacture the highest quality.
Historically, Safilo has been manufacturing around 30% of what we sell, with 70% being outsourced. In the future, we want to reverse this. We have already brought a lot in-house, a large part made in Italy. We have three plants-one in Slovenia concentrating on our proprietary Optyl material, a manufacturing plant in China, and a plant in Clearfield, UT, where we manufacture the sport product.
The benefits of our Optyl material, first and foremost, are that it is much easier for optometrists and opticians to work with. We feel very strongly about the craftsmanship of eyewear. In addition to designing out of our Padova headquarters as we’ve always done, over the past two years, we have opened design studios in Milan, Portland and New York with plans to open more in places such as Asia. Last year, we launched a Product School in Italy where we take a group of young people into an apprenticeship with Safilo.
SAILER: How would you describe Safilo’s position in the U.S. market?
BLOMQVIST: The business has been built firmly on independent optometrists, opticians and ophthalmologists. That remains our strength. Our distribution across the U.S. is very strong, especially among independent opticians. We want to make sure we are present in all trade channels. We have a strong portfolio of nearly 30 brands so we want to be able to differentiate our offerings depending on the channel and customer. My mission will be to widen the U.S. distribution footprint.
We cover all segments, from atelier-the very highest end-to fashion luxury, as well as contemporary, to the segment that we call “mass cool,” where our Polaroid brand is the mega brand. We will be adding Havaianas into that, and our cooperation with Swatch is another example. Then, we have the sports and outdoors segment anchored by our iconic American Smith brand. And, as the second largest manufacturer in the world, we feel strongly about our responsibility to develop product for all segments. We wanted to develop product specifically for kids which is why we launched the Kids by Safilo product line last year.
SAILER: What role do buying groups play?
BLOMQVIST: We have traditionally dealt directly with independent opticians. In Europe, we already have strong relationships with the buying groups. In the U.S. we have not done that historically so much, but our clear aspiration is that we do want to develop and have very strong relationships with the buying groups, and we’re taking concrete steps already to that effect.
SAILER: What is the company’s e-commerce strategy?
BLOMQVIST: We have a lot of brands that lend themselves really well to shoppers who like to purchase online, but not all brands do. The Smith target consumer is very tech-savvy and likes to shop online, so therefore, Smith is one of those brands that will have a big online presence. Carrera and many other brands also fit that bill as well. On the licensed brand side, the highest end, not every brand has a strategy to go into e-commerce.
SAILER: What other strategies do you plan to implement?
BLOMQVIST: We have some very clear corporate strategies. Differentiation is one. Another is balance. We want to be much stronger with our own core brands. Polaroid, Carrera, Smith, Safilo and Oxydo represent just below 25% at the moment, and we want them to be at 45% by the year 2020.
We are putting a lot of resources behind Polaroid and Carrera. Those two brands are top priorities. It will start with the product innovation we are bringing into the marketplace. We have just launched Polaroid optical, which is known as the original polarized lens sunglass brand, and you will see a lot more investment on the Carrera collection such as the Jared Leto celebrity endorsement, representing a significant investment from our side.
Then, within the licensed brands portfolio it is all about finding a good balance between the different segments. Gucci historically has been a very big brand because Safilo made it big over the past 20 years. We’ve invested heavily behind the brand. The collection is massive as is the consumer universe that Gucci covers which is why the brand is huge. In the future, we don’t intend to build one or two mega-brands; we will build a very balanced portfolio.
One of the immediate steps in the U.S. is to replace the business that we currently do with Gucci. The strategy is not to acquire a license or buy a brand. It is to understand the different segments that Gucci currently serves when it comes to consumers and then replace that business with suitable brands. In the highest end, especially on the ladies’ side, it’s Dior, right beneath Jimmy Choo and Fendi, beneath MaxMara and Hugo Boss, the Marc Jacobs mega brand and Kate Spade and Carrera on the upper contemporary.
We have divided the Gucci business into different pieces, and then we are laser targeting what we will offer instead of Gucci. We have clearly defined the brands that will replace Gucci, and then we have the brands like Céline, Givenchy, Tommy Hilfiger and Fossil, that we expect to continue to grow very fast in the U.S. as well. So, the replacement strategy for Gucci is, on the one hand, to replace it, and, on the other hand, continue to grow those brands organically that are not directly intended to replace Gucci.
SAILER: Will you be adding to the house brand portfolio?
BLOMQVIST: Our CEO has been clear that Safilo is in the marketplace to acquire brands. The last major acquisition was Polaroid in 2012. It’s the fastest-growing sunwear brand in Europe. In the BU5 (Italy, Spain, France, Germany and the U.K.), Polaroid is number two in market share, in volume just behind Ray-Ban.
We want to make acquisitions, but we also want to complement our licensed brand portfolio. The most recent examples are Elie Saab, that will be launching January 2017 at the highest end and will have a very narrow distribution worldwide, and then when we go to the other end to “mass cool” with Havaianas, which we will start in August in Brazil and then launch globally in January 2017. Both brands have global appeal.
SAILER: How has Kering’s decision to internalize its eyewear business im-pacted Safilo?
BLOMQVIST: We will be selling the Gucci license on December 31st. At roughly 2 p.m., when the last sale is done, that’s when we will stop selling Gucci. As of January 2017, we will manufacture Gucci. So the impact from a manufacturing point of view is that we still manufacture it. As we anticipated the end of the license together with the Kering fashion house by two years, they paid us â‚¬90 million, as compensation, which is a sizable amount of cash.