Luxottica

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Luxottica Group S.p.A.
Società per azioni
Traded as BIT: LUX, NYSE: LUX
Industry Eyewear, fashion, luxury, manufacturing, retail, wholesale distribution
Founded Agordo, Italy, in 1961
Headquarters Milan, Italy
Area served
 Worldwide
Key people
Products Sunglasses, spectacle frames, prescription frames
Services Opticians, optical retail, sun retail
Revenue €7.652 billion (2014)[1]
€1.158 billion (2014)[1]
Total assets €9.594 billion (2014)[1]
Total equity €4.928 billion (2014)[1]
Number of employees
 77,734 (2014)[1]
Divisions Eyemed, Lenscrafters, Pearle Vision, Sears Optical, Target Optical, Sunglass Hut, Ilori-Optical Shops of Aspen, David Clulow, GMO, Laubman & Pank, OPSM, Glasses.com, Onesight
Website luxottica.com

Luxottica Group S.p.A. is an Italian eyewear company. It is the world's largest eyewear company, controlling over 70% of the world's major eyewear brands.[2][3] Luxottica is the owner of Lenscrafters, Sunglass Hut, Pearle Vision, Sears Optical, Target Optical, Eyemed vision care plan, and Glasses.com. Its more well-known brands are Ray-Ban, Persol, and Oakley. Luxottica also makes sunglasses and prescription frames for a multitude of designer brands such as Chanel, Prada, Giorgio Armani, Burberry, Versace, Dolce and Gabbana, Miu Miu, Donna Karan, Stella McCartney, and Tory Burch.[4][5]

History

Leonardo Del Vecchio started the company in 1961,[6] in Agordo north of Belluno, Italy; today the company is headquartered in Milan.

Del Vecchio began his career as the apprentice to a tool and die maker in Milan, but decided to turn his metalworking skills to making spectacle parts. So in 1961, he moved to Agordo in the province of Belluno, which is home to most of the Italian eyewear industry.[7] The new company was Luxottica s.a.s., a limited partnership with Del Vecchio as one of the founding partners.[7] In 1967, he started selling complete eyeglass frames under the Luxottica brand, which proved successful enough that by 1971 he ended the contract manufacturing business.[8]

Convinced of the need for vertical integration, in 1974, he acquired Scarrone, a distribution company.[7] In 1981 the company set up its first international subsidiary, in Germany, the first in a rapid period of international expansion.[7] The first of many licensing deals with a designer was struck with Armani, in 1988.[9]

The company listed in New York in 1990,[10] and in Milan in December 2000,[11] joining the MIB-30 (now FTSE MIB) index in September 2003.[12] The listing raised money for the company and allowed it to use its shares to acquire other brands, starting with Italian brand Vogue Eyewear in 1990, Persol and US Shoe Corporation (LensCrafters) in 1995, Ray-Ban in 1999 and Sunglass Hut, Inc. in 2001.[7] Luxottica later increased its presence in the retail sector by acquiring Sydney-based OPSM in 2003, Pearle Vision and Cole National in 2004.[13]

The company also acquired Oakley in a US$2.1 billion deal in November 2007,[14] and in August 2011 Erroca for €20 million.[15]

In March 2014, it was announced that Luxottica would partner with Google on the development of Google Glass and its integration into Luxottica's eyewear.[16]

On the 1st September 2014, a new organizational structure was announced, composed of two co-CEOs, one focusing on market development and the other overseeing corporate functions. After the exit of former CEO Andrea Guerra, Enrico Cavatorta was appointed CEO of Corporate Function and Interim CEO of Market (until new and permanent appointment to this role).[17][18][19]

Brands

Persol sunglasses
Ray-Ban sunglasses

Luxottica's two main product offerings are sunglasses and prescription frames. The company operates in two sectors: manufacturing & wholesale distribution, and retail distribution.[20]

The house brands include:[21][22]

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The company also makes eyewear under license for designer labels such as:[21][23]

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The most recent deal was with Tory Burch. These brands are sold in the company's own shops, as well as to independent distributors such as department stores, duty-free shops, and opticians.

Retail

Luxottica Retail has more than 7,000 retail locations in the United States, South America, Canada, China, Australia, New Zealand, South Africa, the United Kingdom, and United Arab Emirates.[13] The headquarters of the retail division is in Mason, Ohio (North America).[13] Their retail banners include:[26]

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Charity

Luxottica had three charitable programs named Give the Gift Of Sight, Pearle Vision Foundation in North America, and the I-Care Community in Australia. These three programs were founded in 1988. Luxottica came to a decision to unite all three charitable programs into one global foundation and called it OneSight. Cincinnati, Ohio and Milan, Italy launched this foundation in December 12, 2008 bringing this new foundation 20 years of experience. "OneSight, a Luxottica Group Foundation and a nonprofit corporation, is a family of charitable vision programs dedicated to improving vision through outreach, research, and education."[27] This charity helps the less fortunate by providing free eye exams along with free eyewear. These charitable programs has helped about 8.5 million people in 40 countries since 1988. Luxottica brings together affiliated and independent doctors, employees, vendors, and donors to volunteer their time using their expertise providing services, the opportunity of volunteering is not available to the public. OneSight is able to achieve giving the gift of sight to the less fortunate through four program areas: Global Eye Care, Regional Eye Care, Community Eye Care, and Preventative Eye Care.

Global Eye Care

OneSight conducts clinics in developing countries. Doctors provide free eye exams, then volunteer employees provide recycled and new manufactured eyewear.

Regional Eye Care

Volunteers join local charitable partners to provide free eye exams and eyewear in their home country across North America and Australia.

Community Eye Care

Local volunteers will help the less fortunate through retail and outreach programs.

Preventative Eye Care

OneSight Research Foundation provide research grants to find treatments and cures for threatening vision disorders and diseases.

In 1995, OneSight launched a new technique to help the less fortunate called SeeMore. It is a "vision van" which brings services to the less fortunate who are not able to travel. The vision van travels to schools to provide eye exams and eyewear to the kids. In 2004, the vision van helped 6,155 people affected by Hurricane Katrina in Louisiana and Texas.[28]

Medical managed care

Luxottica also owns EyeMed Vision Care, a managed vision care organization in the United States.[29] As of 2014, it is the second largest vision benefits company in the United States.[30][31][32]

Criticism

Recent criticism has come upon the high prices of Luxottica's luxury brand named glasses, such as Ray-Ban, Oakley, and several others. A 2012 60 Minutes segment focused on whether the company's extensive holdings in the industry were used to keep prices high. Luxottica owns not only a large portfolio of brands such as Ray-Ban and Oakley, but also retailers like Sunglass Hut and Oliver Peoples, as well as the optical departments at Target and Sears. In addition, by owning the vision insurance company EyeMed, it controlled a portion of the buyers' side of the market as well.[31] CEO Guerra said that Luxottica did have competitors at the retail level in the American market, such as Walmart, and Costco.[31]


Financial performance

(Amounts in thousands of Euro)

Year Net sales (K€) Operating income (K€) Net income (K€) - Net Income attributable to Luxottica Group Stockholders
2014[1] 7,652,317 1,157,613 642,596
2013 7,313,000 1,056,000 545,000
2012 7,086,142 982,049 541,700
2011 6,222,483 807,140 452,343
2010 5,798,035 712,158 402,187
2009 5,094,318 571,085 299,122
2008 5,201,611 731,639 390,167
2007 4,966,054 833,264 489,850

data retrieved from Luxottica website

Transfer pricing issues

In December 2013, Luxottica Group paid €33 million to the Italian Agency of Revenue to settle transfer pricing issues that arose in 2007.[33]

Major shareholders

The list of Luxottica shareholders with more than 2% of holdings, represented by voting shares at 23 December 2014.[34]

In September 2012, Delfin S.a.r.l. reduced its share of Luxottica from 66% to 62.1%,[35] but later increased its share to 66% again.

References

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 Lua error in package.lua at line 80: module 'strict' not found.
  2. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  4. ↑ Brett Arends, "Are Designer Sunglasses Worth the Price?", Wall Street Journal, July 22, 2010.
  5. ↑ Eyewear brands, May 1, 2015.
  6. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ 7.0 7.1 7.2 7.3 7.4 Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ 13.0 13.1 13.2 Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Google to De-Dorkify Glass in Partnership With Ray-Ban Maker Luxottica, Businessweek, March 25, 2014
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  19. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ 21.0 21.1 Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  24. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  25. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  26. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  27. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  28. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  29. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  30. ↑ "Activities: Managed Vision Care", Luxottica website
  31. ↑ 31.0 31.1 31.2 Lua error in package.lua at line 80: module 'strict' not found.
  32. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  33. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  34. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  35. ↑ Mesco, Manuela, "Delfin cuts Luxottica stake to 62.1% from 66%", MarketWatch, Sept. 6, 2012

External links

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