Source: Forbes, Jul 2013
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.
The entire eyewear market was valued at $81 billion in 2011 and is expected to reach $130 billion by 2018.
Luxottica’s 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–39% since 2008 to $716 million in 2012. In 2011, net income was $597 million.
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.