LensCrafters 2010 Annual Report Download - page 42

ANNUAL REPORT 2010> 40 |
July
On July 30, 2010, we completed the acquisition of the 34.0 percent interest held by minority stockholders in Sunglass Hut
(UK) Limited, one of our English subsidiaries, for approximately GBP 27.8 million, bringing our ownership in this subsidiary
to 100 percent.
September
On September 30, 2010, the Company closed a private placement of Euro 100 million senior unsecured guaranteed
notes, issued in two series (Series G and Series H). The aggregate principal amounts of the Series G and Series H Notes
are Euro 50 million and Euro 50 million, respectively. The Series G Notes mature on September 15, 2017 and the Series H
Notes mature on September 15, 2020. Interest on the Series G Notes accrues at 3.75 percent per annum and interest on
the Series H Notes accrues at 4.25 percent per annum. The Notes contain certain financial and operating covenants. The
Company was in compliance with those covenants as of December 31, 2010. The proceeds from the Notes, were used for
general corporate purposes.
October
On October 5, 2010, Luxottica Group S.p.A. announced the signing of a license agreement with Coach Inc. for the design,
manufacturing and global distribution of sun and prescription eyewear under the Coach, Coach Poppy and Reed Krakoff
brands. Distribution of Coach eyewear collections will be through Coach stores across the world, through select department
stores primarily in North America, Japan, China and other countries in East Asia as well as through select travel retail
locations, independent optical locations and Luxottica’s retail chains. The agreement, which includes a renewal option,
will begin on January 2012 and the first collection will be presented during 2012.
November
On November 10, 2010, the Company issued senior long–term notes to institutional investors (Eurobond dated November
10, 2015) for an aggregate principal amount of Euro 500 million. The notes mature on November 10, 2015 and the fixed
gross coupon is equal to 4.00 percent. The notes are listed on the Luxembourg Stock Exchange (ISIN XS0557635777). The
notes were issued in order to exploit favorable market conditions and extend the average maturity of the Group’s debt.
3. FINANCIAL RESULTS
We are a global leader in the design, manufacture and distribution of fashion, luxury and sport eyewear, with net sales
reaching Euro 5.8 billion in 2010, approximately 62,000 employees and a strong global presence. We operate in two
industry segments: (i) manufacturing and wholesale distribution; and (ii) retail distribution. See Note 4 to the Notes to
the Consolidated financial statements as of December 31, 2010 for additional disclosures about our operating segments.
Through our manufacturing and wholesale distribution segment, we are engaged in the design, manufacture, wholesale
distribution and marketing of house and designer lines of mid– to premium–priced prescription frames and sunglasses. We
operate our retail distribution segment principally through our retail brands, which include, among others, LensCrafters,
Sunglass Hut, Pearle Vision, OPSM, Laubman & Pank, Budget Eyewear, Bright Eyes, Oakley “O” Stores and Vaults, David
Clulow and our Licensed Brands (Sears Optical and Target Optical).
As a result of our numerous acquisitions and the subsequent expansion of our business activities in the United States
through these acquisitions, our results of operations, which are reported in Euro, are susceptible to currency rate fluctuations
between the Euro and the U.S. dollar. The Euro/U.S. dollar exchange rate has fluctuated from an average exchange rate
of Euro 1.00 = US$ 1.3947 in 2009 to Euro 1.00 = US$ 1.3257 in 2010. Additionally, with the acquisition of OPSM and Bright
Eyes (acquired through Oakley), our results of operations are susceptible to currency fluctuations between the Euro and
the Australian dollar. Although we engage in certain foreign currency hedging activities to mitigate the impact of these
fluctuations, they have impacted our reported revenues and expenses during the periods discussed herein.