De Rigo: sales results for the first six months

De Rigo posted net sales of Eur 267.5 m for the first six months of 2005, a decrease of 3.0% as compared with the same period last year.

Highlights of the Group's unaudited sales results for the first six months of 2005 include:
- Consolidated net sales were Eur 267.5 m, as compared with Eur 275.9 m posted in the first six months of 2004. Foreign currency effects had a negative impact of 1.2% on net sales;
- Wholesale & manufacturing sales amounted to Eur 79.4 m, a decrease of 4.1% from Eur 82.8 m posted in the first six months of 2004. Foreign currency effects had a negative impact of 0.4% on wholesale & manufacturing sales;
- Sales through the retail companies amounted to Eur 195.0 m, a decrease of 1.9% from Eur 198.7 m posted in the first six months of 2004. Foreign currency effects had a negative impact of 1.6% on retail sales.

The Group's consolidated net sales of Eur 267.5 m were broken down as follows: eyewear sales of Eur 122.6 m, lens sales of Eur 80.0 m, contact lens sales of Eur 39.6 m and other sales and revenues of Eur 25.3 m, as compared with sales of Eur 129.3 m, Eur 82.8 m, Eur 38.3 m and Eur 25.5 m, respectively, for the first six months of 2004.

Foreign currency translation differences had a negative effect on consolidated net sales, particularly with regard to the translation into Euro of sales made in Pounds Sterling, Japanese Yen and Hong Kong Dollars, as the average exchange rate for these currencies in the first six months of 2005 was less favourable to the Group than that during the first six months of 2004.

Analysing consolidated net sales by geographic area, net sales in Europe amounted to Eur 238.0 m, a decrease of 3.8%, primarily as a result of lower sales through the Group's retail companies and a decline in wholesale sales in certain markets. Net sales in the Rest of the World increased by 5.0% to Eur 25.4 m, reflecting the Group's positive results in certain Far Eastern markets. Net sales in the Americas amounted to Eur 4.1 m, a decrease of 6.8%, primarily as a result of lower sales in the US market.

Wholesale & manufacturing sales amounted to Eur 79.4 m, a decrease of 4.1% from Eur 82.8 m posted in the first six months of 2004. Wholesale & manufacturing sales in the first six months continued to be impacted by the expiry of the Group's license agreement with Fendi as of the end of 2004. Management expects that the negative impact on the segment's sales of the expiry of the Fendi license will eventually be more than offset by increased sales under the new license agreements De Rigo signed with Chopard, Ermenegildo Zegna, Escada and Jean Paul Gaultier during the last quarter of 2004 and first quarter of 2005. However, deliveries of Chopard and Escada-branded eyewear have only started recently, while those of Ermenegildo Zegna and Jean Paul Gaultier products have not yet started. As a result, sales of the new brands contributed less to the segment's sales during the first six months of 2005 than those of Fendi-branded eyewear during the first six months of last year.

Sales through the retail companies amounted to Eur 195.0 m, a decrease of 1.9% from Eur 198.7 m posted in the first six months of 2004.
D&A's sales were Eur 120.5 m, a decrease of 5.3% as compared with sales of Eur 127.3 m posted in the first six months of 2004. Sales declined by 2.9% in Pound Sterling terms, less than in Euro Terms, reflecting the decrease of the Pound Sterling's value against the Euro. Same store sales per working day in Pound Sterling terms decreased by 3.8%. Sales of franchised stores during the period amounted to Eur 32.3 m, a decrease of 8.0%; in Pound Sterling terms, sales of franchised stores decreased by 5.6%. D&A's results were negatively affected by declines in sales in both value and volume terms, which reflected a general downturn in the British optical market. At June 30, 2005, D&A operated a network of 235 owned shops and 140 franchised shops.
GO's sales increased by 4.3% to Eur 74.5 m from Eur 71.4 m posted in the first six months of 2004, as a result of positive same store sales, which rose by 1.1% on top of the 7.8% increase posted in the first six months of 2004, as well reflecting the impact of the opening of new owned and franchised stores. At June 30, 2005, GO operated a network of 153 owned shops and 22 franchised shops, having opened a net total of 7 owned shops and 7 franchised shops during the last twelve months.