Grab Your Glasses, This Company's Worth a Look
Like watches and shoes, eyeglasses have become fashion accessories. Fashionable people buy multiple pairs, which is one reason for the success at Luxottica Group (LUX).
Based in Milan, Luxottica turned 50 last year and is the leader in a fragmented industry. It designs, manufactures and sells eyewear bearing recognizable names like Oakley and Ray-Ban. It also makes glasses for fashion houses like Chanel and runs outlets that include LensCrafters, Sunglass Hut and Pearle Vision.
Last year it had record sales, 6.2 billion Euro (at present rates, $7.9 billion). Of those sales, 58% came from North America, 20% came from Europe, 12.5% from Europe, and the rest from South and Central America and the Middle East.
This being an Italian fashion company, it tends toward luxury rather than prescription glasses, and that hurt it during the economic downturn. But sales increased 15% in the first half of the year, despite the fiscal problems in Europe.
Emerging markets figure into its plans for growth. In 2009 it bought a company operating in South and Central America. Last year it bought two retail chains in Mexico, and in January it bought most of a Brazilian company, saying it furthered its strategy to expand its business in South America.
Founder and chairman Leonardo Del Vecchio has controlled 66% of the shares. But as the Wall Street Journalreported, he announced this week intentions to sell 7% of the company, a $1.15 billion stake at current market cap.