Luxottica Group S.p.A. is an Italian glasses company and the world's largest company in the eyewear industry. It's based in Milan, Italy.
As a vertically integrated company, Luxottica designs, manufactures, distributes and markets glasses brands, including LensCrafters, Sunglass Hut, Apex by Sunglass Hut, Pearle Vision, Sears Optical, Optical Targets, Eyemed vision care plans and Glasses.com. Its famous brands are Ray-Ban, Persol, and Oakley.
Luxottica also makes sunglasses and recipe frames for designer brands like Chanel, Prada, Giorgio Armani, Burberry, Versace, Dolce and Gabbana, Miu Miu, DKNY, and Tory Burch.
In January 2017, Luxottica announced a merger with Essilor to be completed by mid-2017, resulting in a combined market capitalization of approximately EUR46 billion. The combined entity will command more than a quarter of the global value of optical sales. In March 2018, the European Commission unconditionally approved the incorporation of Essilor and Luxottica.
Video Luxottica
Histori
Leonardo Del Vecchio started the company in 1961, in Agordo north of Belluno, Italy; today the company is headquartered in Milan.
Del Vecchio began his career as an apprentice for the tool and die maker in Milan, but decided to change his metalworking skills to create a spectacle part. So in 1961, he moved to Agordo in the province of Belluno, which is home to most of Italy's glasses industry. The new company is Luxottica s.a.s., A limited partnership with Del Vecchio as one of the founding partners. In 1967, he began selling the complete eyewear frame under the Luxottica brand, which proved quite successful so in 1971 he ended the contract-making business.
Convinced of the need for vertical integration, in 1974, he acquired Scarrone, a distribution company. In 1981, the company established its first international subsidiary, in Germany, the first in a period of rapid international expansion. The first of many licensing deals with a designer was hit with Armani, in 1988.
The company was registered in New York in 1990, and in Milan in December 2000, joined the MIB-30 index (now FTSE MIB) in September 2003. The list raised money for the company and allowed it to use its shares to acquire another brand, with the Italian brand Vogue Eyewear in 1990, Persol and the United States Shoe Corporation (LensCrafters) in 1995, Ray-Ban in 1999 and Sunglass Hut, Inc. in 2001. Luxottica later increased its presence in the retail sector by acquiring Sydney-based OPSM in 2003, Pearle Vision, and Cole National in 2004. Luxottica acquired Oakley in November 2007 for US $ 2.1 billion. Oakley tried to argue their price for Luxottica's huge market share, and Luxottica responded by dropping Oakley from their store, causing their stock prices to fall, followed by a cruel takeover of Luxottica against the company. In August 2011, Luxottica acquired Erroca for EUR20 million.
In March 2014, it was announced that Luxottica would partner with Google on the development of Google Glass and its integration into Luxottica eyeglasses.
On September 1, 2014, a new organizational structure was announced, consisting of two co-CEOs, focusing on market development and other overseeing corporate functions. After leaving ex-CEO Andrea Guerra, Enrico Cavatorta was appointed CEO of Corporate Function and Interim Market CEO (until a new and permanent appointment for this role).
Enrico Cavatorta left the company 40 days after being appointed CEO. In 2016, it was reported that Luxottica had lost its third chief executive in a year and a half as Adil Mehboob-Khan resigned a year after he replaced Cavatorta.
In January 2017, the company approved a merger worth EUR46 billion with Essilor. The deal will also help offer a succession plan for Leonardo Del Vecchio, the company's founder.
Maps Luxottica
Eyeglass Brands
Two of Luxottica's major product offerings are sunglasses and recipe frames. The Company operates in two sectors: manufacturing & amp; wholesale distribution, and retail distribution.
The home brand includes the following:
The company also makes glasses under license for the following designer labels:
These brands are sold in the stores owned by the company itself, as well as to independent distributors such as department stores, tax-free shops, and optics experts.
Retail
Luxottica Retail has about 9,000 retail locations in the United States, Latin America, Canada, China, Australia, New Zealand, South Africa, United Kingdom, and United Arab Emirates. The headquarters of the retail division is in Mason, Ohio, United States (North America). Their retail banners include the following:
Luxottica is the largest optical retailer in the United States, with 7.3% of US retail sales by 2015.
Maintained medical care
Luxottica also has EyeMed Vision Care, a vision care organization managed in the United States. In 2014, this is the second largest vision benefit company in the United States.
Criticism
Monopoly pricing practices
The company has been criticized for the high prices of branded sunglasses, such as Ray-Ban, Oakley, and several others. The 2012 Segment 60 Minutes focuses on whether the company's extensive ownership in the industry is used to keep prices high. Luxottica has not only a large portfolio of brands (more than a dozen) such as Ray-Ban and Oakley but also retailers such as Sunglass Hut and Oliver Peoples, optical departments at Target and Sears, as well as the eye insurance group including the two largest eyewear insurance companies in the US. It has been accused of operating a complete monopoly on the optical industry and overcharging for its products - for example, temporarily knocking Oakley competitors off its frame design list, then, when the company's stock falls, buys the company, then increases the price of Ray-Ban sunglasses. In addition, it has been argued that, by having an EyeMed vision insurance company, it also controls part of the buyer's market as well.
The company says that the market is very competitive, and their frame accounts for ~ 10% of worldwide sales and ~ 20% in the United States. Euromonitor International estimates that Luxottica's market share is 14% worldwide, and the second largest company in the industry, Essilor, has a 13% market share. The third greatest player is Johnson & amp; Johnson, with a 3.9% market share. Luxottica and Esslisor (end of 2017) in the merger process, subject to regulatory permits and possible competitive conditions.
Financial performance
Transfer pricing issue
In December 2013, Luxottica Group pays EUR33 million to the Italian Revenue Agency to resolve the transfer pricing issue that emerged in 2007.
List of Luxottica shareholders with more than 2% ownership, represented by voting shares on December 23, 2014.
- Delfin S.a.r.l. 66,485%
- Deutsche Bank Trust Company Americas (as ADR depository) 7.466%
- Giorgio Armani 4,955%
In September 2012, Delfin S.a.r.l. reduced its share of Luxottica from 66% to 62.1%, but then increased its share to 66% again.
See also
- Safilo
References
External links
- Official website
Source of the article : Wikipedia
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