Over the years, Luxottica Group has consolidated its global leadership in the fashion and luxury eyewear industry by virtue of:
The vertical integration of design, manufacturing and distribution makes Luxottica’s business model unique in the industry. This is 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 finds itself well positioned for future growth. The strength of its brand portfolio, the very good positioning of its retail chains, the progress made by its optical business in Asia-Pacific (including its successful retail acquisitions in China) and the restructuring of Sunglass Hut in Asia-Pacific and the UK, enable Luxottica to focus its resources on the next stage of growth and consolidation.
Luxottica operates three leading optical and sun retail brands: LensCrafters, Pearle Vision and
Sunglass Hut. Despite the slowdown in the economy, Luxottica maintained its position of having
the #1 optical and sun retail brands in North America in 2007, which was a very busy year in terms
of investments, with 327 new store openings, 585 store remodels and the launch of ILORI, a new
luxury retail brand.
The Group’s brands will leverage the investments made in stores and systems integration in order
to grow market share and customer loyalty.
LensCrafters
LensCrafters customers can expect sophisticated style and ambience, best-in-class service, style
consulting and a broad selection of premium products. LensCrafters staff are focused on the
customer’s style and on delivering excellence in customer service.
Pearle Vision
Consumers have always seen this longest-standing American optical brand as a provider of
“trusted eye care” offering thorough exams and products of the highest quality. Luxottica has
continued to improve the already excellent standards of eyecare and the relationship of trust with
its consumers, including through the introduction of new technology (Optomap Digital Retinal
imaging and EasyView lens) to a majority of locations and through the Group’s growth in Canada.
Sunglass Hut
Luxottica will continue to pursue the strategies that have proven successful in recent years, thus
increasing the share of fashion frames sold in its stores and further strengthening customer loyalty
with a vast selection of models helping consumers express their personal style. Nearly 70% of all
stores will have been remodeled by the end of 2008 and new advertising campaigns will direct
consumers to www.sunglasshut.com to boost the online business. Sunglass Hut will continue to
show customers the latest collections from the brands in its portfolio and organize special
marketing projects tied to specific brands.
ILORI
In 2007, Luxottica launched ILORI, creating a new luxury retail niche serving the needs of our most
sophisticated consumers. Flagship stores in New York and Los Angeles anchored six openings in
2007 with 15 to 20 more planned for 2008. Initial results are already exceeding high expectations
as ILORI focuses on prestigious locations, brand exclusivity and extremely high service levels.
Licensed Brands (Sears Optical and Target Optical)
Luxottica continues to see significant growth potential in this segment, and in Sears Optical and
Target Optical in particular. Sears Optical continues to refine its “Everyday Simple Pricing” strategy,
which is seeing excellent consumer response to online appointment scheduling with its affiliated
doctors. Target Optical continues to develop its store base and marketing partnerships. The
license agreement with BJ’s Wholesale Club was terminated in March 2008 as it was no longer in
line with the Group’s strategy in this segment of business.
Lens Finishing Labs
Luxottica Group has made major advancements in increasing its lens finishing capacity and
invested in advanced technologies to deliver higher-margin services to its customers. In 2007, two
older plants were replaced by a new state-of-the-art facility in Columbus, Ohio, and Pearle Vision
store labs were centralized to improve service and quality levels. The Group is now positioned to
be self-sufficient in terms of lens finishing and proprietary product development. Over the next two
to three years the Group will focus on systems integration, advanced technologies and facility
improvements.
Managed Vision Care: EyeMed Vision Care
EyeMed Vision Care is one of the largest managed vision care operators in the United States
providing vision insurance to more than 23 million eligible customers, including some of the largest
category and corporate insurance programs in the nation. Luxottica will continue to develop exclusive
relationships with American “Group Discount Plans” to further increase benefit usage by members.
In this increasingly important geographical region, which over the last two years has reported very significant growth, the Group:
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.
With the launching of the Burberry, Polo Ralph Lauren and Tiffany collections and the scheduled expiration of other licensing agreements, Luxottica considers its work on optimizing its brand portfolio substantially completed. By combining excellent, constantly available pre- and post-sale services, the Group satisfies customer expectations and market demands in the best possible way.
House brands
Ray-Ban continues to be one of the great strengths of the Group’s brand portfolio, given its
excellent growth potential in both established and emerging markets. At the start of 2007, it
launched a new strategic platform and a global advertising campaign for Ray-Ban - Never Hide -
to support new growth objectives for what is already the most important eyewear brand in the
world. Other house brands the Group considers key are: Persol, a brand with a rich history and
strong appeal, Vogue, Arnette and Revo. A new priority will be the Oakley brand, acquired in 2007,
which will have a big opportunity at the 2008 Beijing Olympics.
Licensed Brands
Any new licensed brands will have to be very strong in markets strategically important for the
Group or 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 recently acquired brands but also with
brands that entered the portfolio some years ago and still have significant growth potential.
Despite its presence in 130 countries, Luxottica sees further potential both in markets where it already operates and in new markets. An area of focus will be emerging markets, which already produced very good results in 2007. Growth rates and margins are expected to remain higher in emerging markets than in consolidated markets.
Luxottica will continue to stand for “Made in Italy” eyewear thanks to the quality and style of its products, which enjoy leadership status 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 levels of its products. The Group is well placed to meet growing demand in the retail segment in North America, in Asia-Pacific and in business generated by recent licensing agreements. To this end, in fact, it intends to leverage the manufacturing and logistical advantage of being the only premium eyewear manufacturer in the world with two wholly-owned manufacturing facilities in China. This is where the Group makes products not requiring the degree of value added achieved by “Made in Italy” manufacturing. As a result, this will add greater manufacturing flexibility in Italy for producing the more sophisticated, complex designs increasingly in demand in Luxottica’s wholesale and retail markets.
A wholly owned subsidiary of Luxottica, Oakley is a premium performance brand. Founded in California in 1975, Oakley designs, manufactures and distributes high performance sunglasses, prescription eyewear, goggles, electronically enabled eyewear, apparel, footwear and accessories. Luxottica acquired Oakley in November 2007, combining the resources, capabilities and talents of the two global companies.
Oakley blends science and art to redefine product categories by rejecting the constraints of conventional ideas. Oakley earned its heritage of authenticity by reinventing products from scratch, achieving superior quality and genuine innovation that delivers the unexpected. Holding more than 600 patents and 1,200 trademarks, Oakley offers technological and lifestyle performance to consumers in more than 100 countries.
Oakley innovation is backed by considerable research into new materials and technologically advanced production facilities. Such innovation not only reinvents performance in professional sport categories but delivers useful crossover to the lifestyle market as well.
Oakley invents each new product with a design philosophy called Sculptural Physics: the discipline of solving problems with science and wrapping those solutions in art.
Sunglasses
Numerous patents have been awarded for the innovations of High Definition Optics® (HDO®),
and Oakley is recognized for its specially formulated lens colors, materials and coatings,
proprietary frame architectures, and technologies of performance and protection, including
polarized lenses to maintain precision optics.
Prescription eyewear
Oakley offers a comprehensive line of ophthalmic-specific frames, corrective sun lenses and
optical laboratory services. Technologies include metal frames with shape memory, photochromic
lenses that actively darken in response to sunlight, interchangeable prescription lenses, and the
proprietary Oakley Rx system, which maps light rays in a three-dimensional grid to achieve precise
coordination between the eye and the entire lens surface..
Goggles
Sports categories that rely on Oakley goggle technology include motocross, snowboarding, skiing,
BMX, mountain biking and water sports. Oakley goggles feature scratch-resistant Plutonite or
Lexan lenses, conical frames and multi-layered face foams for added comfort and durability.
Optically correct lenses are engineered to maximize peripheral and downward vision while
optimizing impact protection.
Electronically enabled eyewear
Oakley designs and distributes a limited line of electronically enabled eyewear incorporating digital
music playback capability (in the MP3 file format) and Bluetooth® wireless technology that allow
users to stay connected to calls and music while hiking, biking and doing virtually any activity
where cords and wires would get in the way.
Apparel, footwear and accessories products
Oakley designs, develops and markets men’s and women’s apparel, including styles designed for
surf, snow, golf, outdoor, motor sport, mountain bike and other athletic lifestyles. Oakley utilizes its
design technologies to create technical apparel featuring innovations that enhance durability,
performance and comfort for use during professional competitions, and then translates those
innovations into products that are made available to the general public. Oakley’s innovative,
performance-inspired footwear emphasizes superior performance, fit, durability and functionality.
Oakley designs, assembles and distributes a comprehensive line of premium watches with an
aesthetic emphasis on sculpture and styling. As with Oakley’s other products, its watches employ
innovative blends of specialized materials to enhance performance, comfort and durability.
In addition to Oakley-branded optics products, Oakley’s eyewear portfolio also includes Oliver Peoples, Eye Safety Systems, Fox Racing, Mosley Tribes, Paul Smith Spectacles and Dragon.
Oliver Peoples
Founded in 1986, Oliver Peoples helped establish the luxury eyewear market, and Oliver Peoples
eyewear is worn by many of the world’s most well-known celebrities. Oliver Peoples’ classic
designs fuse old-world aesthetics with modern-day finesse.
Eye Safety Systems
ESS designs, develops and markets advanced eye protection systems for military, fire fighting and
law enforcement professionals and is a leading supplier of protective eyewear to the U.S. military
and firefighting markets. Designed for hostile and unforgiving environments, ESS products ensure
peak performance and uncompromised eye safety.
Fox Racing
Oakley is the exclusive worldwide licensee of Fox Racing (Fox), a leading apparel brand in the
motocross industry, for sunglasses and goggles. Oakley designs, develops and manufactures
optics products in cooperation with Fox and is responsible for worldwide marketing and
distribution.
Mosley Tribes
The Mosley Tribes brand, launched in 2005, is a modern brand fusing fashion and urban lifestyles.
Paul Smith Spectacles
The licensed Paul Smith Spectacles brand, which launched in 1994, includes prescription eyewear
and sunglasses that feature designs synonymous with one of Britain’s leading fashion designers.
Dragon
Dragon creates unique products that help define today’s youth by drawing influences from sports,
art, youth-influenced music and street culture. Dragon’s sunglasses, goggles and accessories
complement its customers’ independent attitude and authentic action sports lifestyles. Dragon
products are currently sold at retailers in more than 45 countries around the world.
In addition to its wholesale business, the Group acquired retail chains through Oakley, including Bright Eyes, Oakley Stores and Vaults, Sunglass Icon, The Optical Shop of Aspen, and Oliver Peoples.
Bright Eyes
Established in 1985, this is one of Australia’s largest and fastest-growing sunglass specialty retail
chains. With over 140 stores, it offers a multi-branded selection ranging from pure sport to high
fashion.
Oakley Stores and Oakley Vaults
Oakley Stores offer a full range of the company’s sunglasses, goggles, prescription eyewear,
apparel, footwear and accessories. Oakley Vaults, an outlet store concept, feature discontinued
and excess seasonal Oakley-branded merchandise in addition to newer products priced at full
retail.
Sunglass Icon
Established in 1982, this is one of the nation’s largest specialty retailers of sunglasses and
sunglass accessories. From pure sport to active lifestyle and fashion, Sunglass Icon’s multibranded
assortment of fresh, cutting-edge and playful styles meets the needs of the most
discriminating customer.
The Optical Shop of Aspen
The Optical Shop of Aspen operates luxury optical retail stores offering fashion and luxury eyewear
from a variety of designers, including many Group-owned brands.
Oliver Peoples
Oliver Peoples operates four luxury optical retail stores selling Oliver Peoples products.