Over the years, Luxottica Group has refined its global leadership in the fashion and luxury eyewear industry to the following key components:
The vertical integration of design, manufacturing and distribution makes Luxottica Group’s business model unique in the industry, as reflected in the Group’s success and its long-term partnerships with key fashion and luxury brands.
With its recent retail acquisitions, ongoing consolidation of its brand portfolio and wholesale distribution and another year of strong growth, Luxottica Group today finds itself well positioned for future growth. The successful integration of the businesses acquired with Cole National in 2004, particularly the improvement in the performance and profitability of Pearle Vision, the progress made by its optical business in Asia-Pacific and the restructuring of Sunglass Hut in the same region and the UK, as well as retail acquisitions in China, will allow the Group to focus its resources on the next stage of growth and consolidation. Outlined below are Luxottica Group’s key strategic objectives for the medium term.
Luxottica Group operates three leading optical and sun retail brands: LensCrafters, Pearle Vision and Sunglass Hut. In order to expand the potential of these brands, the Group continues to work on perfecting each brand’s positioning in its respective segments by emphasizing how each retail brand is uniquely positioned in the eyes of the consumer, thus improving their ability to more effectively serve the market. This process will be supported by continued major investments in the store base, both to improve the network and to make store formats more appealing for customers and the market.
LensCrafters
Further emphasis will be placed on a stylish and fashion-oriented shopping environment, where
consumers can find more premium products, fashion advice and the highest levels of service and
convenience. LensCrafters’ new store concept was launched in April 2006 and is producing
excellent results.
Pearle Vision
The longest-standing optical brand in the United States, Pearle Vision is again being perceived
by consumers as the brand of “trusted eyecare,” providing eye exams of the highest standards
and top-quality eyewear. Luxottica Group will further expand Pearle Vision’s high standard of
optical care and its relationship of trust with the consumer with the introduction of new
technology and advertising campaigns. Additional forms of communication will also be used to
enhance the appeal of the chain’s offerings in the eyes of the consumer. The Group firmly
believes that the Pearle Vision brand has significant growth opportunities in both the United States and Canada, where the brand was strengthened in 2006 and is now the only optical chain
represented throughout Canada.
Sunglass Hut
Luxottica Group will continue along the path it has followed in recent years. The strategy will be to
increase the percentage of fashion frames sold in stores, as such frames carry higher profit margins
and stronger appeal for female consumers who typically exhibit higher frequency purchase cycles.
The brand’s positioning will also be supported through the careful location of new stores and the
ongoing store remodeling plan that will have updated approximately 85% of in-line stores by the end
of 2008.
Licensed Brands (Sears Optical, Target Optical, BJ’s Optical)
The Group recently entered this segment and immediately became its most important operator. The
segment shows significant growth potential in both quality and volume. Luxottica Group is well
positioned to serve this market with its distribution and manufacturing structures.
Lens finishing labs
Combining its broad presence in the market with additional capacity for handling lens finishing work,
Luxottica Group anticipates increasing availability of its higher-margin lens treatments to consumers
at its stores. Lens finishing labs are also expected to contribute to a reduction of the time and cost
of finishing work provided by third parties.
Managed Vision Care: EyeMed Vision Care
EyeMed Vision Care is now the one of the largest managed vision care operator in the United States.
Its ability to serve the market has increased both from a geographical standpoint and in terms of
product offerings, making EyeMed Vision Care services even more appealing for corporations and
their employees, and resulting in an increase in the number of consumers using vision benefits both
at independent and Group stores.
In this increasingly important geographical region, the Group plans to:
The Group believes it has excellent opportunities in the sun segment, where it has the advantage of operating the only truly global brand, Sunglass Hut. In 2006, Luxottica Group announced Sunglass Hut stores (under franchise) would open in the Persian Gulf region. It plans to continue this expansion.
With the signing of license agreements with Burberry, Polo Ralph Lauren and Tiffany & Co. and the scheduled expiration of other agreements, Luxottica Group’s work on optimizing its brand portfolio is nearing completion. By combining excellent, constantly available pre- and post-sale services, the Group strives to satisfy customer expectations and market demands in the best manner possible.
House brands
Ray-Ban continues to be one of the great strengths of Luxottica Group’s brand portfolio, given its
excellent growth potential in both established and emerging markets. At the start of 2007, the Group
launched Never Hide, a new strategic platform and a global advertising campaign for Ray-Ban to
support new growth objectives for what is already the most-recognized eyewear brand in the world.
Other key house brands are: Persol, a brand with a rich history that is performing very well; Vogue,
a brand that underwent significant development in 2005; Arnette and Revo.
Licensed brands
Luxottica Group will continue to look for brands that are strong in strategically important markets or
brands that cover segments of the market that would enhance the present portfolio. In the
meantime, the Group’s focus will be to achieve maximum growth with new brands and within
existing brands that have significant growth potential.
The Group sees further potential both in markets where it already operates and in new markets. An area of focus will be emerging markets, which produced very good results in 2005 and 2006. Growth rates and margins are expected to remain higher in emerging markets than in developed markets.
Luxottica Group will continue to stand for «Made in Italy» eyewear, thanks to the quality and style of its products, which are among the most coveted and recognizable in the premium segment. It will continue to invest in new technology, production systems and research and development in order to maintain the high value-added advantages of its products.
The Group’s growth in the retail segment in North America, especially in terms of volume in the licensed brand segment and the new license agreements entered into during the last two years, is increasing demand. To meet this demand, Luxottica Group intends to maximize the manufacturing and logistical advantage of being the only premium eyewear manufacturer in the world with a wholly-owned manufacturing capability in China. At its facilities in China, the Group manufactures products that do not require the degree of value-added craftsmanship achieved by «Made in Italy» manufacturing. As a result, this will add greater manufacturing flexibility in Italy for producing the more sophisticated, complex designs that are increasingly in demand in Luxottica Group’s wholesale and retail markets.