A nice article and interview on Luxottica

[Sportgamma]

"the appearance of variety is an optical illusion"

 

Forbes article:

 

So, what’s the deal with Luxottica? The Milan-based company started off pretty small back in 1961 with now chairman Leonardo Del Vecchio selling small parts to the optical industry.

 

By 1971, the company was producing a finished pair of glasses from start to finish, and was wholesaling its first collection of eyewear.

 

Today, Luxottica controls the whole operation and cutting out the middleman. Not only is it making the glasses it but it’s also selling them directly through Sunglasses Hut, Lenscrafters, Pearle Vision–all are owned by Luxottica.

 

That kind of model is known as vertical integration. It’s risky but it can work out very well and be extremely cost efficient.

 

60 Minutes on CBS last year interviewed Luxottica CEO Andrea Guerra about his company’s dominance in the eyewear space. He estimated some 500,000 people were wearing his sunglasses around the world.

 

In addition to its 7,000 retail stores and its roughly 10 production facilities the company owns some of the brands it sells like including Ray-Ban which is bought in 1999, Oakley which is bought in 2007, Vogue, Oliver Peoples, Persol, Alain Mikli, Arnette and REVO. These proprietary brands accounted for 70% of frame sales with Ray-Ban and Oakley making up nearly 45% of the sales.

 

It licenses the other designer brands including Bulgari, Burberry, Chanel, Coach, Dolce & Gabbana, Donna Karan, Paul Smith, Polo Ralph Lauren, Prada, Stella McCartney, Tiffany, Tory Burch, Versace and Armani.

 

The agreements with these brands are exclusive meaning no other manufacturer can make their glasses. They last from three to ten years.

 

Luxottica pays the designers a royalty of 5% to 14% of net sales and a marketing fee of 5% to 10% depending on the agreement. Prada and Dolce & Gabbana are the big money-makers for the company making up 3.9% and 2.6% of sales respectively.

http://www.forbes.com/sites/halahtouryalai/2013/07/02/ray-ban-oakley-chanel-or-prada-sunglasses-theyre-all-made-by-this-obscure-9b-company/?partner=yahootix

 

60 Min. coverage:

http://www.cbsnews.com/video/watch/?id=7424700n

[fareastwarriors]

Essilor to Buy Ray-Ban Maker Luxottica for About $24 Billion

 

https://www.bloomberg.com/news/articles/2017-01-15/luxottica-essilor-agree-to-50-billion-euro-merger-ft-reports