To our shareholders,
2006 was a record year for Luxottica Group.
Excellent results in all key markets contributed to exceptional growth of 30% in the wholesale division. We are also very proud of our retail results, especially in North America, where sales rose nearly 8%. In 2006, consolidated net income increased 30%, which is more than twice the increase in consolidated sales.
During the course of the year, we continued to build upon the significant strengthening of our brand portfolio achieved in 2005. With record results by Ray-Ban, new license agreements with global brands Polo Ralph Lauren and Tiffany & Co., and a strong launch of the Burberry line, today the Group has a brand portfolio whose breadth and balance are matched only by the prestige of its brands.
On the retail front, we moved ahead with our investment plan to further improve our store network and better position Luxottica Group to take advantage of new growth opportunities. These investments will continue in 2007. We launched the LensCrafters brand in China with the opening of its first flagship store in Beijing and positioned it in this important market as the standard for premier eyecare and a trendsetter for luxury eyewear.
2007 will be another important year for our growth and for the history of the Group. Two of our main brands will celebrate important anniversaries: Persol, the worldwide emblem of «Made in Italy» eyewear and a brand synonymous with elegance, comfort and quality, will turn 90; and Ray-Ban, the world’s best-known and best-selling eyewear brand, will turn 70. These two great brands share a history of quality, excellence and success. Above all, both brands are posting strong contributions to our results and leading the path to future growth.
We are a leader in a fast-growing market that is generating new and increasing opportunities for continued strong growth. Eyewear is a key fashion and luxury accessory and has become a growing reflection of an individual’s personality. Markets that were only prospects for growth a few years ago are already vibrant and growing. In the more established markets in the West, a major opportunity for growth is tapping into the aging population, particularly Baby Boomers, who demonstrate a propensity to take care of themselves and to frequently indulge in fashion and luxury products.
In 2006, we continued to invest time and resources in making our management structure stronger and more globally integrated. We are in the right place at the right time. We are determined to pursue growth opportunities wherever they arise, to push the confines of our market ever outward and to take even better care of our customers.
This is why we expect 2007 to be another important year for Luxottica Group - in fact, another record year.
May 2007