Luxottica

Luxottica was an Italian eyewear company founded by Leonardo Del Vecchio in 1961 in Agordo, in the Veneto region's Belluno eyewear district. It began by making metal spectacle components and later progressed to producing complete frames under its own name. The company's central strategic idea was vertical integration: rather than relying only on independent manufacturers and retailers, Luxottica progressively built capabilities in design, production, wholesale distribution, branded licensing, optical retail and vision-care benefits. The business expanded from manufacturing into distribution with its acquisition of Scarrone in 1974 and established its first international subsidiary in Germany in 1981. Its first major designer licensing agreement, with Giorgio Armani, was signed in 1988. Luxottica subsequently used acquisitions and licensing to assemble a broad portfolio spanning proprietary brands, licensed designer labels and retail banners. Key transactions included Vogue Eyewear in 1990, Persol and LensCrafters in 1995, Ray-Ban from Bausch & Lomb in 1999, Sunglass Hut in 2001, OPSM in 2003, and Pearle Vision and Cole National in 2004. In 2007 it acquired Oakley, adding a major sports and performance-eyewear brand. Luxottica's owned brand portfolio included Ray-Ban, Oakley, Persol and Oliver Peoples, while licensing agreements covered labels such as Giorgio Armani, Chanel, Prada, Burberry, Versace, Dolce & Gabbana, Michael Kors, Coach, Miu Miu and Tory Burch. The group sold prescription frames and sunglasses through independent optical channels, department stores, duty-free outlets and its own retail network. Its retail banners included LensCrafters, Sunglass Hut, Pearle Vision, Target Optical and Glasses.com. Through EyeMed Vision Care, it also operated in the United States vision-benefits and managed-care market. The company listed American depositary receipts in New York in 1990 and shares in Milan in 2000. It remained publicly traded while controlled by Delfin, the investment company associated with Del Vecchio. Luxottica attracted recurring criticism over the concentration of ownership across eyewear brands, manufacturing, retail and vision benefits, and over the prices charged for branded frames. Critics argued that the company's structure gave it substantial influence over the eyewear value chain. Luxottica responded that the market remained competitive and that its global share did not amount to a monopoly. In January 2017, Luxottica and French ophthalmic-optics company Essilor agreed to combine. The transaction received unconditional European Commission approval in March 2018, and EssilorLuxottica was established on 1 October 2018. Luxottica therefore ceased to operate as an independent listed group and became part of the combined company. Its principal brands, retail operations, manufacturing capabilities and organizational legacy continue within EssilorLuxottica.

Leonardo Del Vecchio founded Luxottica in 1961 in Agordo, a major Italian eyewear-production center. Del Vecchio had trained in metalworking and initially applied those skills to spectacle parts. The company first operated as a supplier and contract manufacturer, but in 1967 it began selling complete frames under the Luxottica name. The success of the branded-frame business led it to leave contract manufacturing and concentrate on products carrying greater design and commercial value. Vertical integration became the defining feature of Luxottica's development. The acquisition of distributor Scarrone in 1974 gave the company greater control over how products reached customers. An international subsidiary in Germany followed in 1981, beginning a period of overseas expansion. In 1988 Luxottica signed its first important designer licensing agreement with Giorgio Armani, establishing a model that would allow it to manufacture and distribute eyewear associated with prominent fashion houses while also developing brands it owned outright. Luxottica entered public markets in New York in 1990 through American depositary receipts and expanded its brand and retail portfolio. It acquired Vogue Eyewear in 1990, Persol and LensCrafters in 1995, Ray-Ban from Bausch & Lomb in 1999, and Sunglass Hut in 2001. Further retail expansion came through OPSM in 2003 and Pearle Vision and Cole National in 2004. The acquisition of Oakley in 2007 added a leading sports and performance-eyewear franchise. Luxottica also developed online and international retail operations and acquired Erroca in 2011. The company was listed in Milan from 2000 and joined the principal Italian stock-market index in 2003. Its operating model covered product design, frame manufacturing, wholesale distribution and retail. In addition to proprietary labels, the company produced eyewear under licenses for numerous luxury and fashion brands. Its retail network included LensCrafters, Sunglass Hut, Pearle Vision, Target Optical and Glasses.com. EyeMed Vision Care extended the group into United States vision benefits and managed care. This combination made Luxottica unusual in the sector because it participated on both the supply side and the consumer-facing side of the market. The company's scale also generated criticism. Commentators and competitors argued that ownership of major brands, retail chains and a vision-benefits provider gave Luxottica unusual bargaining and price-setting power. Particular attention focused on the company's decision to stop carrying Oakley products before later acquiring Oakley, as well as claims that branded frames could be sold at very large markups. Luxottica maintained that eyewear was a competitive global market and disputed descriptions of its position as a monopoly. Luxottica underwent management instability in the middle of the 2010s. A two-chief-executive structure was announced in 2014 after Andrea Guerra's departure. Enrico Cavatorta left roughly forty days after his appointment, and Adil Mehboob-Khan later departed after about a year. Del Vecchio consequently resumed a more active executive role. In January 2017 Luxottica agreed to combine with Essilor. The European Commission approved the deal in March 2018, and EssilorLuxottica was formed on 1 October 2018. Luxottica's independent corporate history ended at that point, although its brands, stores, factories and commercial capabilities became core components of EssilorLuxottica.

1. 2018EssilorLuxottica is formed

   Following regulatory approval, the combined holding company begins operating on 1 October.

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2. 2017Combination with Essilor announced

   Luxottica and Essilor agree to create a combined ophthalmic-optics and eyewear group.

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3. 2007Oakley acquired

   Luxottica completes the acquisition of Oakley for approximately US$2.1 billion.

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4. 2001Sunglass Hut acquired

   The acquisition strengthens Luxottica's international specialty-sunglasses retail network.

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5. 1999Ray-Ban acquired from Bausch & Lomb

   Luxottica acquires the Ray-Ban brand and adds one of the world's best-known sunglasses franchises.

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6. 1995Persol and LensCrafters acquired

   The company expands both its proprietary-brand portfolio and optical-retail presence.

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7. 1990New York listing and Vogue Eyewear acquisition

   Luxottica lists American depositary receipts in New York and acquires Vogue Eyewear.

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8. 1988First major designer licensing agreement

   Luxottica signs a licensing agreement with Giorgio Armani.

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9. 1974Scarrone distribution acquisition

   Luxottica acquires a distribution company, strengthening its vertically integrated model.

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10. 1967Complete frames sold under the Luxottica name

    The company moves beyond components and begins selling complete eyeglass frames under its own brand.

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11. 1961Luxottica is founded in Agordo

    Leonardo Del Vecchio establishes the company in Italy as a manufacturer of spectacle components.

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A vertically integrated, global eyewear platform combining proprietary and licensed brands with manufacturing, wholesale distribution, optical retail and vision-care services.

• Ray-BanOwned eyewear brand

  Ray-Ban is Luxottica's best-known acquired brand and is associated primarily with sunglasses and optical frames. Luxottica acquired it from Bausch & Lomb in 1999 and used its manufacturing, distribution and retail network to expand the brand globally. Its portfolio includes classic sunglasses as well as prescription products.

• OakleyOwned sports eyewear brand

  Oakley is a sports and performance-eyewear brand acquired by Luxottica in 2007. It is known for technical sunglasses, optical frames and products marketed toward sport, outdoor and active-lifestyle users. The brand added a performance-oriented identity to Luxottica's fashion and lifestyle portfolio.

• PersolOwned premium eyewear brand

  Persol is an Italian premium eyewear label acquired by Luxottica in 1995. It focuses on sunglasses and optical frames with a strong connection to Italian design and craftsmanship. The brand occupies a more refined, heritage-oriented position than mass-market eyewear labels.

• Oliver PeoplesOwned premium eyewear brand

  Oliver Peoples is a premium eyewear brand within the Luxottica portfolio. It offers optical frames and sunglasses positioned around understated design, luxury materials and a selective fashion distribution model.

• LensCraftersOptical retail

  LensCrafters is an optical retail chain acquired by Luxottica in 1995. It combines eye examinations, prescription eyewear and retail services and became one of the principal channels through which Luxottica reached consumers in the United States and other markets.

• Sunglass HutSpecialty retail

  Sunglass Hut is a specialty retailer focused on sunglasses and related eyewear. Acquired in 2001, it gave Luxottica a prominent international consumer-facing platform for both owned and licensed brands.

• EyeMed Vision CareVision benefits

  EyeMed Vision Care is a United States managed vision-care and vision-benefits business associated with Luxottica. It broadened the company's role beyond products and retail into reimbursement, insurance and access to vision-care services.

• 2014Google Glass eyewear partnership

  International

  Luxottica announced a partnership with Google to explore the development and integration of Google Glass into eyewear designs.

  Outcome. Created a technology-oriented collaboration, although the reference material does not establish a resulting mass-market product.

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• 1988Giorgio Armani eyewear licensing

  International

  Luxottica's agreement with Giorgio Armani established a long-running model of partnering with designer fashion houses to create, manufacture and distribute branded eyewear.

  Outcome. Helped establish Luxottica as a major licensed-designer eyewear platform.

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• 1988OneSight

  International

  Luxottica was affiliated with OneSight, a charitable initiative providing vision-related services and support to underserved communities.

  Outcome. The initiative later formed part of broader EssilorLuxottica philanthropic activity.

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• 2017Agree to combine with EssilorM&A

  Luxottica and Essilor each held important positions in different parts of the global vision and eyewear value chain.

  What changed. The companies agreed to create a combined group, with Del Vecchio designated as executive chairman and Hubert Sagnières continuing in senior leadership.

  Aftermath. After regulatory approval, EssilorLuxottica was established on 1 October 2018 and Luxottica ceased to be an independent listed group.

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• 2014Introduce a two-chief-executive structureStrategy

  The company reorganized after the departure of Andrea Guerra.

  What changed. Luxottica divided leadership between market development and corporate functions, appointing Enrico Cavatorta to corporate functions and as interim market chief.

  Aftermath. Cavatorta left after about forty days, followed by further executive turnover and Del Vecchio's return to a more active leadership role.

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• 2007Acquire OakleyM&A

  Oakley was a major sports-eyewear competitor and had disputed aspects of Luxottica's pricing and distribution power.

  What changed. Luxottica completed the acquisition of Oakley for approximately US$2.1 billion.

  Aftermath. Oakley became part of Luxottica's owned brand portfolio and strengthened its position in performance eyewear.

  Acquisition price. Approximately US$2.1 billion (2007)

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• 1974Build a vertically integrated distribution systemStrategy

  Luxottica sought greater control over the route from manufacturing to customers.

  What changed. It acquired Scarrone, a distribution company, and continued expanding into international subsidiaries, licensing and retail.

  Aftermath. Vertical integration became the company's core operating model.

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• 2019Public claims of very high eyewear markupsControversy

  Former LensCrafters executive E. Dean Butler told the Los Angeles Times that some eyewear prices represented markups approaching 1,000 percent, intensifying public criticism of the industry's pricing structure.

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• 2012Criticism over pricing and market concentrationControversy

  Media coverage and industry critics alleged that Luxottica's ownership of prominent brands, optical retailers and EyeMed gave it excessive influence over eyewear prices and distribution. The company rejected the characterization of its position as a monopoly and emphasized competition in the global market.

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• 2007Oakley distribution dispute before acquisitionControversy

  The reference account describes a dispute involving Oakley's challenge to Luxottica's pricing and Luxottica's decision to remove Oakley products from certain stores before subsequently acquiring the company. The episode became part of later criticism of Luxottica's market power.

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• 2019Luxottica delists following the formation of EssilorLuxottica

  Luxottica shares were removed from the Italian market after the combination created EssilorLuxottica as the continuing listed group.

  M&AOther
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• 2018European Commission clears the Essilor-Luxottica combination

  The European Commission approved the transaction without conditions, clearing the way for the new holding company.

  M&ARegulation
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• 2018EssilorLuxottica is established

  The combined EssilorLuxottica holding company was established on 1 October, ending Luxottica's independent corporate existence.

  M&A
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• 2018European Union unconditionally approves the Essilor-Luxottica merger

  European regulators approved the transaction without conditions, clearing a major regulatory step toward formation of EssilorLuxottica.

  M&ARegulation
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• 2017Luxottica agrees to combine with Essilor

  Luxottica announced an agreement to combine with French ophthalmic-optics company Essilor, with Leonardo Del Vecchio designated to become executive chairman of the combined group.

  M&A
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• 2017Essilor and Luxottica announce proposed combination

  The two companies announced a combination intended to unite ophthalmic lenses, frames, sunglasses, brands, manufacturing, and retail operations.

  M&A
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• 2007Luxottica acquisition of Oakley receives Australian competition clearance

  The Australian Competition and Consumer Commission concluded that the proposed Oakley acquisition was unlikely to substantially lessen competition in the examined optical markets.

  M&ARegulation
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• 2004Luxottica completes acquisition of Cole National

  Cole National became a wholly owned Luxottica subsidiary, adding North American optical retail operations and leading to the delisting of Cole National shares.

  M&A
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• 2003Luxottica acquires OPSM

  The purchase of Australian optical retailer OPSM strengthened Luxottica's retail platform in Australia and the wider Asia-Pacific region.

  M&A
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• 2001Luxottica announces acquisition of Sunglass Hut International

  The acquisition expanded Luxottica's direct-to-consumer presence and added a major international sunglasses retail chain to its vertically integrated model.

  M&A
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1. Luxottica
2. EssilorLuxottica
3. Luxottica official website
4. Luxottica delists following the formation of EssilorLuxottica
5. European Union unconditionally approves the Essilor-Luxottica merger
6. Essilor and Luxottica announce proposed combination
7. Luxottica acquisition of Oakley receives Australian competition clearance
8. Luxottica completes acquisition of Cole National