LensCrafters 2008 Annual Report Download - page 41

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FINANCIAL OVERVIEW |39 <
Oakley stepped up its commitment to the women’s eyewear business by doubling the number of styles
released in 2008.
Awareness of Oakley’s superior lens technologies has also helped increase sales of Oakley’s polarized
eyewear. Oakley enthusiasts continue to flock to the premium priced Exclusive Eyewear collection, which
includes signature models such as LiveStrong and Ducati and the highly successful Major League Baseball
(MLB).
Oakley goggle sales were up from 2007. The Shaun White and Gretchen Bleiler models in the snow line
and the James Stewart MX line were the key contributors in 2008, along with strong sales in military
goggles. Exposure in the 2008 X-Games created increased awareness that helped to drive sales. ESS
brand military goggles were similarly successful.
Oakley’s Custom Eyewear Program grew in 2008 driven by an expanded style and color offering, channel
presence in Oakley retail doors and a re-designed Oakley.com website. In 2008, Oakley goggles were also
added to the Oakley Custom Program, which allows consumers to choose frame, lens and customizable
strap combinations to fit their personal preferences.
Lastly, the license brand portfolio was enriched by the emerging Stella McCartney brand, whose sun
collections will start being distributed in summer 2009, and by the renewal of the Chanel license, one of
the world’s most prestigious luxury brands whose collaboration with Luxottica has been an asset to the
Group for years.
RETAIL
For fiscal year 2008, net sales by the retail distribution segment were Euro 3,109.1 million compared to Euro
3,262.3 million in 2007. The 4.7% decrease was largely due to the strengthening of the Euro against the US
dollar (reducing net sales by Euro 228.3 million) and to a 6.8% decrease in comparable store sales(1) in North
America. The negative effect of exchange rates was partially offset by the inclusion of Oakley’s retail results
(Euro 170.9 million).
Pro forma(2) retail net sales in 2008 was down by 8.8% from 2007 due to both the strengthening of the Euro,
with a negative impact of Euro 228.3 million, and to poor performance overall in the retail distribution
segment, which lost Euro 70.5 million (2.1%) as demand contracted.
Geographically, the contraction in sales in North America, where traffic through stores had begun to slacken
at the beginning of the year, was offset by a substantially positive performance by the segment in all other
regions.
Net sales by the North American retail division accounted for 83.6% of total retail net sales worldwide
against 84.1% in 2007. In US dollars, net sales in North America rose 1.6% from US$ 3,763.7 million in 2007
to US$ 3,822.3 million in 2008 thanks primarily to the inclusion of the Oakley business. In euros, on the other
hand, performance was negative, with net sales falling 5.3% due to the strengthening of the Euro against
the dollar.
In the optical business, comparable store sales(1) by LensCrafters and Pearle Vision were down 6.5%, while
sales by licensed brand chains fell 9.1% in 2008.
The sun business, on the other hand, proved less cyclical. Comparable store sales by Sunglass Hut across
the globe were down 4.9% year over year in 2008, with a marked difference between results in North
America and other regions, such as Australia and New Zealand (which grew by around 4.5%).
(1) Comparable store sales reflects the change in sales from one period to another that, for comparison purposes, includes in the calculation only
stores open in the more recent period that also were open during the comparable prior period, and applies to both periods the average exchange
rate for the prior period and the same geographic area
(2) Pro forma data reflects the inclusion of results by Oakley, Inc., a subsidiary that was acquired in November 2007, as if it had been acquired on
January 1, 2007.