Most sunglasses are made by the same company, according to a Forbes story in it s July 2013 magazine. An obscure Italian company Luxottic makes almost all luxury brands and is rapidly moving into prescription brands as well, being sold in lens crafters, sunglasses hut and other not so lux retailers. So,Ray-Ban, Oakley, Chanel Or Prada Sunglasses? They're All Made By This Obscure $9B Company. I have posted some of the article below and also the web page address for the Forbes article if anyone has another answer. http://www.forbes.com/sites/halahtouryalai/2013/07/02/ray-ban-oakley-chanel-or-prada-sunglasses-theyre-all-made-by-this-obscure-9b-company/#32eb0f156a79 Jul 2, 2013 Forbes : The Little Black Book of Billionaire Secrets Ray-Ban, Oakley, Chanel Or Prada Sunglasses? They're All Made By This Obscure $9B Company Georgia May Jagger is the face of the Ray-Ban brand which is owned by Luxottica. Go to a sunglass counter at any department store and you%u2019ll likely see a crowd willing to pay hundreds of dollars for the perfect pair of designer shades. The money they%u2019re spending is going to a single company that makes just about every designer eyewear brand you can think of. The company is called Luxottica, and it made 75 million glasses last year including Prada PRDSY %, Tiffany & Co TIF 4.62%., Coach COH 0.26%, Versace, Bulgari, Chanel , Dolce & Gabbana, Ray-Ban and more. The Italian company has practically taken over the eyewear market from manufacturing to distribution. Luxottica produced 46.6 million sunglasses and 26.1 million prescription frames (it does not make prescription lenses.) Then it sold them through one of its 7,000 retail stores like Sunglasses Hut, Pearle Vision or LensCrafters around the globe. It also sells its products through third-parties like department stores, duty free shops and sporting goods stores for its Oakley brand. It%u2019s not a bad business to be in. The entire eyewear market was valued at $81 billion in 2011 and is expected to reach $130 billion by 2018. Luxottica%u2019s net sales have increased 36% since 2008 to $9.4 billion in 2012. In 2011, net sales were $8.2 billion. Net income was also up dramatically%u201339% since 2008 to $716 million in 2012. In 2011, net income was $597 million. If you owned Luxottica shares at the start of the year you%u2019d be up 24% compared with 13% for the S&P 500. Luxottica shares are up an impressive 114% over the last five years compared with 26% for the S&P. Recommended by Forbes Luxottica Raises Questions About Brand Authenticity So, what%u2019s 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 able to produce a pair of glasses from start to finish. It then began wholesaling its first collection of eyewear. Today, Luxottica has cut out the middle man. It controls the whole operation. Not only is it making the glasses it but it%u2019s also selling them directly through Sunglasses Hut, Lenscrafters, Pearle Vision%u2013all are owned by Luxottica. That kind of model is known as vertical integration. It%u2019s 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%u2019s dominance in the eyewear space. He estimated some 500 million 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 including Ray-Ban which it bought in 1999, Oakley which it 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. Expect more acquisitions and brand license agreements from Luxottica. In his letter to shareholders, chairman and founder Leonardo Del Vecchio said the company is making a big push in emerging markets particularly in South Asia. It%u2019s targeting double-digit growth in the luxury segment in the premium and luxury brand segment. The company reports 2nd quarter earnings later this month.
