Marcolin S.p.A.

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Marcolin S.p.A.

32913 Longarone (BL)
Località Villanova, 4
Italy
Telephone: +39 437 777111
Fax: +39 437 777282
Web site: http://www.marcolin.com

Public Company
Incorporated: 1961
Employees: 1,200
Sales: $174.9 million (2002)
Stock Exchanges: Milan
Ticker Symbol: MCL
NAIC: 339115 Ophthalmic Goods Manufacturing

Marcolin S.p.A. manufactures more than six million fashion sunglasses and optical frames a year at two factories in Italy. In addition, it produces ski goggles and sports eyewear through its subsidiary Cébé at two plants in France. For the first several decades of its existence, the company produced optical frames only. But with the emergence of sunglasses as a popular fashion accessory in the 1990s, Marcolin began making sunglasses for leading international fashion houses. The company now has licenses to produce frames under more than a dozen different brand names, including Dolce & Gabbana, Roberto Cavalli, Montblanc, Mossimo, and North Face. Marcolin's designers work with each fashion house to retain the distinctive look and individual identity of the brand. In addition, Marcolin produces and markets sunglasses and optical frames under its own house brand. The company has several subsidiaries that handle distribution in Europe, as well as a U.S. subsidiary and branches in Brazil and Hong Kong. Members of the Marcolin family are executives at the company and the largest shareholders.

Producing Optical Frames: 1961–88

In 1961 Giovanni Marcolin Coffen began producing optical frames at his "Fabbrica Artigiana Giovanni Coffen Marcolin," or "Artisan Workshop of Giovanni Coffen Marcolin," in the small Italian town of Vallesella di Cadore. The town is located in the northeastern part of the country not far from the Swiss and Austrian borders. His specialty was frames for glasses in rolled gold. Six years later he opened a full-scale factory in the same city and presented his first line of products. His distinctive designs caught on not only in Italy, but in greater Europe as well. The first foreign branch opened in France in 1976. Branches in Switzerland and Germany followed soon afterward. The firm was incorporated officially as Marcolin S.p.A. around 1980 and took direct control of the distribution of its products.

Marcolin entered the U.S. market in 1982 with a joint venture to distribute its brands. By 1985 the second generation of the Marcolin family was involved in the firm: that year Cirillo Marcolin started working for the company at the French branch. A year later he was called back to Italy and rose through positions as an administrative manager, manager of production at three plants, sales manager, and eventually an executive director.

In 1988 Marcolin moved its management and administrative offices about a dozen miles south from Vallesella to the slightly larger city of Longarone. There the company established a second factory for the production of acetate frames, expanding its line beyond the metal-only frames it had been producing up to that point. Distributor branches in Portugal and the United Kingdom also were opened in the late 1980s.

Making Sunglasses for Fashion Brands in the 1990s

The perception of eyewear was changing gradually in the late 1980s and into the early 1990s. Glasses came to be seen not just as a tool for sight correction, but as a fashion accessory that reflected the wearer's individual style. Sunglasses, too, began to be valued more for their role in creating a stylish image than for their function as eye protection. Fashion trendsetters were seen ever more frequently wearing sunglasses at night or indoors, as part of a look that had nothing to do with shielding the eyes from bright light.

Gucci became the first major fashion house, in 1989, to introduce a line of sunglasses. Many other big names in the fashion industry jumped on the bandwagon in the following years, licensing their brands to manufacturers of traditional eyewear for the production of sunglasses. The trend allowed the more exclusive fashion names to achieve a degree of mass distribution for their brands. Sunglasses were a slightly less expensive "point of entry" into higher-end brand names, allowing the consumer to acquire the style of the season with a simple accessory.

Marcolin's first step toward becoming a major licensee for high-fashion brand names came in 1993 when Calvin Klein met with the company and soon after set up a partnership that gave Marcolin the exclusive right to distribute Calvin Klein eyewear in Europe. In 1994 Maurizio Marcolin, son of the company's founder, joined the family business. He eventually became a leader in the company's marketing and licensing activities and presided over the development of partnerships with an array of fashion houses over the next several years. He told the Financial Times in 2000, "We found that consumers were looking at eyewear increasingly as a lifestyle expression by the mid-1990s." Marcolin's first major agreement was signed in December 1995 with the Italian fashion company Dolce & Gabbana. Marcolin acquired the exclusive right for the worldwide production and distribution of Dolce & Gabbana eyewear, including both sunglasses and prescription frames. Designers Stefano Gabbana and Domenice Dolce captured the prevailing attitude in fashion circles when they referred to sunglasses as "dressing for the face." This was the first foray into sunglasses production for both Marcolin and Dolce & Gabbana. Marcolin was easily able to adapt its production capabilities to include sunglasses as well as optical frames.

Marcolin's sales increased as its products gained wider fashion appeal. Sales rose from L 100 billion in 1995 to L 125 billion in 1996 and L 160 billion in 1998. The company strengthened its U.S. presence in 1997 by opening a fully owned distribution subsidiary in New Jersey. Meanwhile, the company added more brand names to its portfolio. In 1997 the company signed an agreement with the Fashion Box Group of Treviso, Italy, to produce sunglasses and reading glasses for men and women under the designer label Replay Eyes. This product line appealed to a younger, more casual market than Dolce & Gabbana. It was available in Italy by the end of 1998 and abroad in 1999. More licensing agreements were signed in 1998, with the designer label Romeo Gigli and with the fashion house Chloé, part of the international Vendome group. The Chloé collection, known as Chloé Lunettes, would include sunglasses and corrective eyewear for women only, and was characterized by large shapes with an elegant 1950s-inspired style. Also in 1998, Marcolin expanded its partnership with Dolce & Gabbana by introducing the line of D & G Eyewear for the youth market.

By 1998 Marcolin was making about 2.5 million frames a year, and sunglasses already accounted for half. The company was planning for aggressive growth by the new millennium. Its goals included a public offering, a license with an American designer, and a 40 percent increase in sales. But Maurizio Marcolin also stressed that the company wanted to be circumspect in its expansion. "We don't want to act like a supermarket of eyewear brands but like a boutique," he told WWD in 1998. "Our approach is one of a partnership with the designers. Our structure still has room for new labels, and now that we've consolidated our European portfolio, we can go overseas."

Growth Through Acquisitions and Licensing Agreements: 1999–2004

Marcolin forged ahead with its expansion plans in 1999. The company was listed on the Milan stock exchange that July in an offering that raised about L 8 billion. The proceeds helped finance the acquisition that July of Cébé, a French company that designed and manufactured ski goggles and other sports eyewear. The acquisition brought about 200 new employees into the Marcolin group and also, for the first time, gave Marcolin the technological ability to make injection-molded plastic eyewear. Cébé was a well-known brand that had been produced for more than 100 years. Marcolin continued producing goods under the Cébé brand name at the company's two factories in the French cities of Morez and Frasne. Marcolin also acquired Cébé's distribution subsidiaries in Sweden, Japan, the United Kingdom, Switzerland, Spain, and Italy. In addition, Marcolin opened a new subsidiary for its own products in Hong Kong that year, to oversee distribution in the Far East as well as Australia and New Zealand.

In 1999 Marcolin also found the American brand it had been seeking when it signed a licensing agreement that summer with the Los Angeles-based casual fashion brand Mossimo Inc. The Mossimo Vision collection was launched in 2000 and included eyewear for both men and women. The company acquired more licensing agreements with European designers that year as well. In May Marcolin partnered with Roberto Cavalli, the Florentine fashion designer, to inaugurate the Roberto Cavalli eyewear collection. Cavalli's icon was the snake, and snake motifs and curvy lines were incorporated into a collection of sunglasses for women. The collection debuted internationally in 2000. In September Marcolin acquired a license to produce sunglasses and optical frames with the Fornarina Vision Up! brand name. The partnership was discontinued at the end of 2003, however. Finally, in 1999 Marcolin renewed its license for the Dolce & Gabbana brand name until 2005. Dolce & Gabbana continued to be one of the company's strongest brand names, accounting for about half of total turnover.

As a result of the acquisition of Cébé, Marcolin's sales rose more than 25 percent in 2000 to L 236 billion. Overall sales were more than double what they had been five years earlier. That October Marcolin added the Miss Sixty brand name to its portfolio, signing an agreement with the Italian fashion firm Sixty S.p.A. The line was targeted at a younger market and would include sunglasses and optical frames for women only. The Miss Sixty line was scheduled to debut in Europe in November 2001, followed by international distribution.

Company Perspectives:

Marcolin is a creative space where eyewear is created that can interpret a modern way of life, conforming to the wishes and suggestions of designers. It is a place where stylistic proposals and precise formal requirements are rationalized and industrialized to create accessories that are perfectly in line with the collections they belong to, but at the same time they are unmistakably characterized by their quality and refinement.

Marcolin grew substantially again in 2001, thanks to the acquisition of a subsidiary in the United States. In February that year Marcolin paid $13 million for Creative Optics Inc., a distributor of eyewear with headquarters in Miami and a distribution center in Scottsdale, Arizona. As a result, Marcolin closed its New Jersey subsidiary and reorganized its North American operations around the new acquisition. Creative Optics was an attractive acquisition for Marcolin because most of its sales were made through mass distribution channels, a sector where Marcolin had only a small share. The acquisition added several "all-American" brands to Marcolin's lineup: Essence, Unionbay, Bob Mackie, NBA Eyewear, and FAO Schwarz. These brands had $28.7 million in net sales the previous year.

Marcolin also signed several more licensing agreements in 2001. In January it partnered with the U.S. sportswear company North Face to introduce a line of technically sophisticated sports eyewear. The agreement enhanced Marcolin's presence in the sports eyewear market and built on the existing sportswear expertise of its subsidiary Cébé. The North Face line would be available starting in 2003. In March 2001 Marcolin signed an agreement with E.C. S.p.A. to make optical frames and sunglasses for men and women under the Costume National brand name. This was a higher-end line, produced in partnership with the designer Ennio Capasa and characterized by large sizes and enveloping shapes. In July that year Marcolin acquired the right to produce eyewear for Montblanc International, the maker of luxury products such as pens, watches, and jewelry. The Montblanc line would be for men only and would emphasize a classic, restrained style. Finally, in September Marcolin signed an agreement with Procter & Gamble to make optical frames and sunglasses under the Cover Girl brand in North America. Marcolin also opened its tenth distribution branch in 2001 in Brazil near Sao Paulo. This was its first location in South America.

By the first years of the new millennium, technology was beginning to rival style as one of the deciding factors in attracting buyers of sunglasses. Maurizio Marcolin told the Financial Times in 2003, "In fashion brands, style is still the number one consideration, but technology now comes a very close second. The consumer demands innovation now, even though the technology already available is far in advance of anything most consumers need. Emphasizing the technology creates a feeling that the sunglasses are both very current and of a certain quality." Marcolin kept pace with this trend by adding technological flair to its product descriptions. For example, the new lines for Costume National and Montblanc featured "mat ruthenium polychromic" or "injected polycarbonate decentered" lenses. In 2002 Marcolin even made an enhanced version of one of its sports sunglasses for a yacht racing team, fitting them with technology that allowed real-time information to be displayed wirelessly on the individual lenses of each team member.

Despite the economic downturn in late 2001 and 2002, Marcolin's sales remained strong, particularly in the Roberto Cavalli and Dolce & Gabbana lines. The company expanded its facilities in October 2002 when it opened a new design location just outside the city of Treviso. The site was housed in an 18thcentury Venetian villa. The company planned to hire more staff, including some foreigners, to meet the design needs of its numerous fashion and sports lines. In July 2003 Marcolin started a renovation of its headquarters in Longarone. Warehouse operations were to be transferred to a new building near the existing plant, and the space that was freed up would be used to enlarge the eyeglass production area. Later that year Marcolin added more brand names to its portfolio when it signed licensing agreements with Kenneth Cole and The Timberland Company. In 2004 Marcolin had grown to be the world's third largest eyewear manufacturer, and its reach was likely to increase as new lines were introduced to fulfill the licensing agreements signed in the preceding years.

Key Dates:

1961:: Giovanni Marcolin Coffen begins producing eyeglass frames in rolled gold in northeast Italy.
1967:: The first factory opens in Vallesella.
1976:: A French distribution subsidiary opens, followed by branches in Switzerland and Germany.
1982:: A joint venture opens for distribution in the United States.
1988:: Company headquarters moves to Longarone, where a second factory is built.
1995:: Marcolin begins making sunglasses after signing a licensing agreement with Dolce & Gabbana.
1999:: Cébé, a French manufacturer of sports eyewear, is acquired; Marcolin lists on the Milan exchange and establishes licensing arrangements with more fashion brands.
2001:: Creative Optics, an eyewear distributor in the United States, is acquired.

Principal Subsidiaries

Marcolin International B.V.; CEBE S.A. (France); Marcolin USA, Inc. (85.4%); Marcolin Asia Ltd. (Hong Kong); Marcolin & Co. S.p.A. (Italy); Marcolin Iberica SA (Spain); Marcolin Portugal; Marcolin Benelux (Belgium); Marcolin UK; Marcolin France; Marcolin Deutschland (Germany); Marcolin GmbH (Switzerland); Marcolin do Brasil.