Your £300 designer sunglasses cost about a tenner to manufacture. Srsly. Nine eye-boggling facts about an industry that should be disrupted - but isn't
by Jackie A
8 months ago
Charles Dahan, 70, a former frame supplier and E.Dean Butler, 74, the founder of LensCrafters, told the mark-ups on eyewear were now as high as 1,000%.
“There is no competition in the industry, not any more," said Dahan. "Federal officials fell asleep at the wheel." Said Butler: “It’s ridiculous. It’s a complete rip-off.”
The fancy packaging doubtlessly costs more than the combination of metal, plastic and a few screws.
2 A single company - EssilorLuxottica - now dominates the global eyewear business
Last October, the world's largest lens maker Essilor (French), merged with the largest frame maker Luxottica (Italian) in a £37bn deal in the hope of selling almost a billion pairs of lenses and frames every year with a workforce 140,000 people. It holds more than 8,000 patents and funds university ophthalmology chairs worldwide. A member of England’s Association of Optometrists warned: "This now allows the group to control all aspects of supply of product — from manufacturer to the end user.”
3 It is a virtual monopoly that manufactures and sells almost 30 leading brands
Gucci, Prada, Chanel, Ray Ban, Oakley, Polo, Ralph Lauren, Versace, Chaps, Paul Smith, Vogue etc. It also owns or runs numerous retail outlets and opticians – Sunglass Hut, David Clulow, Lenscrafters, John Lewis Opticians, Oliver Peoples ... and guess what? It also own the US's second largest vision insurer, Eyemed.
Win, win, win.
4 If you try to compete aqainst it, here's what they do to you ...
In 2001 Luxottica bought Sunglass Hut as part of its vertical expansion and decreed all suppliers drop their prices. Oakley demurred. Founder Jim Jannard flew to Milan to sweet talk owner Leonardo Del Vecchio. He failed, but hoped the two men could be "friends". “We will never be friends,” the Italian reportedly replied. Luxottica stopped selling Oakley's, started manufacturing lookie-likies and in 2007 bought Jannard's company for $2.1bn (£1.5bn).
5 An 83 year old former Italian metal engraver is the mastermind and main shareholder (£38.93%) behind this seemingly unstoppable business
Raised in an orphanage in wartime Milan, Leonardo del Vecchio is known to his workers as "Il Presidente", having launched Luxottica in Agordo in the Dolomite mountains aged 25. He is a father of six from four marriages to three women (he remarried his second wife). In 'A Man Who Sees Far', an official 1991 Del Vecchio biography, his eldest daughter Marisa said: “There were no kisses, no cuddles. Frankly, we were scared of him.” Now worth $20 billion, it appears everyone in the eyewear business fears him.
6 EssilorLuxottica is now poised to cash in on the global epidemic of shortsightedness blamed on screen use
Myopia has doubled among young people in a single generation.
We spend much less time outdoors and more doing this - reading a screen. Whereas sunlight helps moderate levels of dopamine, which influences eye development, apparently too much dopamine means eyeballs grow too long, focusing light in front of the retina, rather than on it, increasing myopia. In the 1950s, between 10% and 20% of Chinese people were shortsighted. Now, among teenagers and young adults, it's 90%.
Bad for our children.
Good for Il Presidente.
7 Competition on the British High Street is running scared too
In January last year, Doug Perkins, who set up Specsavers in Guernsey in 1984 with his wife Dame Mary and who together are worth £1.4 billion, warned that EssilorLuxottica was “throwing hundreds of millions of pounds” at new technologies like automated optometry kiosks that threaten the future of Britain’s high-street opticians altogether. “That is 100% certain to happen,” said Perkins. Will Specsavers and Boots Opticians, (now owned by the US pharmacy chain Walgreens) be able to fight back?
8 EssilorLuxottica is in pole position to produce the first truly wearable pair of smart glasses
Luxottica got into bed with Google back in 2014 to develop "innovative wearable devices". With Luxottica's fashion know-how, Essilor's lens expertise and Google's technology prowess, it is highly likely the next disruption in the eyewear industry will come from them.
9 The usual disruptors are virtually nowhere to be seen, allowing a wiley octogenarian to smash them
US eyewear private company Warby Parker, launched in 2010, is giving it its best shot. It markets itself as the alternative to the 'big, bad corporations'. Privately owned, WP doesn't release figures, but this is what one online wag wrote: "Imagine a bathtub filled with water - now spit into it. The spit is Warby Parker, the rest of the water is Luxottica. They (WP) could be bigger but they are either too hipster or too pussy to make a serious imposing move against Luxottica." Harsh. But maybe true.
(Other brands including Cubitts and Seoul-based Gentle Monster are making waves too. Teeny, tiny waves.)
I now buy my reading glasses from the French companyIzipizi, which opens its first UK store this month. Fun and colourful, they're just £30. All my friends wear them.
From small acorns...