Recently, the television show 60 Minutes aired a segment on the sunglass conglomerate Luxottica. For those of us in the eyewear business there was not much that was new to us. For consumers it was certain to be an eye-opening look into the largest eyewear company in the world.
Think of a famous sunglass brand and Luxottica probably owns it, either outright or through licensing agreements. Ray-Ban, Oakley, Persol, Chanel, Prada, Arnette, Oliver Peoples, Bvlgari, Versace and others are all Luxottica brands. In all they control over 30 brands. Their CEO claimed there are an estimated 500 million people wearing Luxottica frames worldwide.
It doesn’t stop there. They also control a big chunk of the sunglass distribution here in the United States. Sunglass Hut, the largest eyewear retailer is owned by Luxottica. Pearle Vision the largest Rx retailer in the U.S. is owned by Luxottica.
What does this mean to you the eyewear consumer? Basically, higher prices. Fashion brands such as Chanel, Versace, and Prada command prices ($400 and up) that are significantly higher than their manufacturing cost would indicate. Simply stated, and you heard the CEO of Luxottica Mike Guerra say it himself, this is the price the market will bear. They use these large profit margins to buy ad space in most major fashion publications. These are usually full or double page ads touting a specific fashion brand. These ads are not cheap.
But who can afford $400 sunglasses? The same people who buy $400 shoes. These products sell on the economy of prestige. High price and low volume. But remember that a low volume product to Luxottica could still mean selling a hundred thousand of these frames globally, a year.
If you choose to believe the CEO that these fashion houses are submitting designs to Luxottica and that Luxottica engineers are converting them to stylized product that’s fine but I have doubts about this. It’s important to remember that not only does Luxottica control the design but they also control the factories that construct and assemble the frames. In many cases you could go into a Luxottica factory and see various fashion brands from many licensees sitting next to each other. In many ways this is the same way General Motors operated for years with Chevrolet, Buick, Pontiac, and GMC models all assembled by the same parent company.
While Luxottica is the world’s biggest eyewear manufacturer, there are still many companies that operate independently. HaberVision is one of those companies. Like other independents, we are actively involved in the design direction of our brand. We have a distinct design philosophy we are looking for and work with our factories to produce those concepts. We also have some very specific performance attributes we require of the lenses we use in our products because our customers not only want to look good fishing or skiing but be able to increase their performance potential while doing it. This is why we feature a wide variety of lens options such as polarized, photochromatic polarized and lens color choices to allow you to tailor your needs to your sport’s particular requirements.
Because we sell direct to the consumer over the internet our price is significantly lower than those of Luxottica brands. As a manufacturer when you have to sell to distributors who sell to retailers who then sell to consumers you have a lot of layers of price mark-ups that go into the final price. But not with us.
We welcome comparisons between our sport brands and those of Luxottica. In every instance we know you will find our prices to be significantly less. If you enjoy paying for the ad programs and celebrity endorsement fees paid by Luxottica then by all means buy from them. If not, visit www.habervision.com.
Bill Nolan, President of HaberVision