Luxottica Retail to Lay Off 208 in Tennessee After Q3 Sales Fell

Luxottica Retail to Lay Off 208 in Tennessee After Q3 Sales Fell
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Luxottica to Lay Off 208 at Hickory Hill Facility

Luxottica Retail North America Inc. (part of Luxottica Group) filed a WARN notice with the Tennessee Department of Labor and Workforce Development, saying it plans to permanently lay off 208 employees at its Hickory Hill facility in Memphis. In the third quarter, Luxottica reported a decline in its U.S. sales, in large part due to temporary store closures related to Hurricane Harvey and Hurricane Irma.

Luxottica, the luxury eyewear brand, said the effective date for the layoffs is December 31. The employees are not represented by a collective bargaining agreement.

While the Milan, Italy-based eyewear giant did not give a reason for the layoffs, the announcement comes just days after the company reported weak third-quarter results that were blamed, in part, on store closures that came on the heels of Hurricane Harvey and Hurricane Irma.

Luxottica designs, manufactures, and distributes luxury, fashion, and sports eyewear. The Italian-based company’s eyewear can be found in more than 150 countries across five continents. Its portfolio consists of proprietary brands, including “Ray-Ban,” “Oakley,” and “Oliver Peoples,” as well as licensed brands including “Giorgio Armani,” “Burberry,” “Bulgari,” “Chanel,” “Coach,” “Miu Miu,” and “Tiffany & Co.”

Third-Quarter Sales Declined Due to Hurricanes

On October 23, Luxottica Group announced its financial results for the third quarter, ended September 30. Third-quarter sales rose 0.8% on a constant currency basis to more than €2.1 billion (almost US$2.5 billion). When taking into account currency moves, third-quarter sales slipped 3.5%.

Luxottica’s North American retail sales, which accounted for 59% of Luxottica Group’s total sales in 2016, tumbled nine percent year-over-year in the third quarter. Even when factoring in currency moves, sales were down 3.7%.

The eyewear company said Hurricane Harvey and Hurricane Irma forced it to close 570 stores, most of them for more than a week. The store closures hurt its wholesale business. A disruption at a data storage supplier also cut into orders at the end of the third quarter.

In addition to the extraordinary events of the hurricanes, restructuring at Oakley’s sport and retail channels—and changes to the company’s LensCrafters business—helped contribute to a five percent drop in comparable-store sales. By comparison, third-quarter sales in Europe advanced 16% on a constant currency basis.

 

Sources

WARN Report,” Tennessee Department of Labor and Workforce Development, October 26, 2017.

At A Glance,” Luxottica Group, last accessed October 27, 2017.

Luxottica Group: Third Quarter Performance At Dual Speeds, Net Sales Up 0.8%,” Luxottica Group, October 23, 2017.

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