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EssilorLuxottica

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EssilorLuxottica S.A.
Company typePublic
ISINFR0000121667
Industry
Predecessors
Founded1 October 2018; 6 years ago (2018-10-01)
Headquarters
Milan and Paris
Number of locations
17,589 stores (2023)[1]
Key people
Francesco Milleri (Chairman and CEO)
ProductsOphthalmic lenses, optical equipment, prescription glasses and sunglasses
Brands
RevenueIncrease €25.39 billion (2023)[1]
Increase €3.176 billion (2023)[1]
Increase €2.426 billion (2023)[1]
Total assetsDecrease €60.52 billion (2023)[1]
Total equityIncrease €38.89 billion (2023)[1]
OwnerDelfin S.a.r.l. [lb] (32%)[2]
Number of employees
191,706 (2023)[1]
Subsidiaries
Websiteessilorluxottica.com
EssilorLuxottica's former logo used from 2018 to 2022

EssilorLuxottica SA is an Italian-French vertically integrated multinational corporation based in Paris and founded on 1 October 2018 from the merger of the Italian Luxottica with the French Essilor. The eyewear-focused group designs, produces and markets ophthalmic lenses, optical equipment, prescription glasses and sunglasses.

EssilorLuxottica's merger agreement was that Essilor would acquire Luxottica, but Luxottica's leadership would gain seats in leadership and on the board of directors, including Luxottica founder Leonardo Del Vecchio becoming executive chairman. After a public feud between the previous companies' leadership, Del Vecchio was able to win the backing of shareholders and ousted Essilor CEO Hubert Sagnières from the company, appointing his choice of Francesco Milleri as the new CEO.

Upon the merger, the company became the largest player in the eyewear industry, with Essilor contributing numerous proprietary lens technologies as well as the brands Foster Grant and Costa Del Mar. For its part, Luxottica gave the company ownership over numerous eyewear brands including Ray-Ban, Oakley, Persol, Oliver Peoples, and Vogue Eyewear; eyewear retailers LensCrafters, Pearle Vision, and Sunglass Hut, eyewear insurance company EyeMed, and exclusive eyewear licensing deals to numerous fashion houses including Versace, Michael Kors, Prada, Coach New York, Ralph Lauren, Tory Burch, Armani, and Dolce & Gabbana.[3] The company is listed on the Euronext Paris stock exchange under the trading symbol "EL" and is part of the CAC 40 share index which includes the 40 largest capitalized companies traded on the Paris Stock Exchange and the Euro Stoxx 50 which includes the 50 largest companies in the Eurozone. According to Statista, in 2022, the company made €24.49 billion in revenue.[4]

History

For the histories of the two companies prior to the merger, see Essilor § History, and Luxottica § History.

Merger of Essilor and Luxottica

In January 2017, Essilor and Luxottica announced the merger of their activities. After having received the necessary authorizations from the competition authorities of the United States, the European Union, Brazil, Canada and China, EssilorLuxottica was created on 1 October 2018.[5] On a technical level, Essilor acquired Luxottica, though Luxottica founder and executive chairman Leonardo Del Vecchio became co-leader of the new conglomerate, which would change its name to contain both companies. Luxottica proceeded to delist its American depositary receipts from the New York Stock Exchange upon announcement of the merger.[6][7][8][9][10]

Del Vecchio's holding company, Delfin, then held 62.42% of Luxottica, a share that it contributed to EssilorLuxotica. Delfin also became a plurality shareholder of the new group with 38.9% of the capital.[11]

This merger gives birth to a giant of the optical industry, generating a turnover of more than €16 billion and a market capitalization of €57 billion.[12] The merger did not occur without controversy from anti-trust researchers, however, and Turkish authorities, accusing the company of not fulfilling anti-trust obligations it had agreed to during the merger, fined EssilorLuxottica €17 million in late August 2023.[13][14]

Internal war for leadership

Despite the merger being completed in 2018, the company still faced an internal leadership battle for control of the company, fought between old Essilor leadership and Del Vecchio, who went on to state in a March 2019 interview with Le Figaro that Essilor CEO Hubert Sagnières "only listened to himself", and had cost the company up to €600 million in savings from the merger. Sagnières responded to Del Vecchio by accusing the Luxottica founder of attempting to take control of the newly formed conglomerate without offering "a premium to shareholders" of EssilorLuxottica. Del Vecchio further accused Sagnières of inexperience when running an eyewear company. The terms of the merger provided that old Essilor leadership as well as Luxottica's officers would have equal control over the merged entity, though the company would select a new CEO, internally or externally, by the end of 2020.[15][16][17]

Ultimately, Del Vecchio won with the backing of EssilorLuxottica shareholders. Del Vecchio's choice of appointing Francesco Milleri as CEO and Paul du Saillant [fr] as deputy CEO. Saginères ultimately departed EssilorLuxottica after the feud, and Del Vecchio, who previously agreed to limit his voting rights to control the company, regained the full weight of such voting rights. A company statement to the Financial Times reflected the settled nature of the conflict, stating that the resolution of the leadership battle represented "the victory of a vision, the creation of an extraordinary business that is at the beginning of what it can achieve". Del Vecchio further reflected the new company's leadership by going on to state that his "life-long dream" of creating a dominant vertically integrated company in eyewear has "finally come true".[17]

Later acquisitions

At the beginning of 2019, EssilorLuxottica acquired German-based Brille24 GmbH.[18] Essilor's partner Shamir acquired Union Optic, a prescription laboratory that also distributes optical instruments. Essilor also acquired a majority stake in Indulentes, one of Ecuador's leading prescription laboratories, and a majority stake in Metalizado Optico Argentino S.A. (MOA), one of Argentina's leading prescription laboratories.[19]

EssilorLuxottica acquired a 75% stake in the Dutch opticians group GrandVision, which owns Vision Express in the UK and For Eyes in the US, in 2019 for €28 per share, which would value the entirety of GrandVision at 7.2 billion euros.[20]

Del Vecchio passed away in June 2022, leaving $350 million in shares to Milleri.[21][22]

In August 2022, Essilor bought the remaining 50 percent stake in Shamir Optical Industry.[23] Additionally, the company announced it would acquire Israeli startup Nuance Hearing for an undisclosed amount. This was the first major strategy shift and industry expansion for the company after Del Vecchio's 2022 passing, and it accompanied reports that the firm was planning to introduce hearing aid technology into its lenses.[24][25]

In July 2024, EssilorLuxottica agreed to buy US streetwear brand Supreme for US$1.5 billion, expanding its brand portfolio beyond eyewear and lenses for the first time.[26][27][28] Days later, it was reported that Meta was in talks to purchase a 5% stake in EssilorLuxottica.[29]

In July 2024, EssilorLuxottica acquired an 80% shareholding in Heidelberg Engineering.[30] The Germany-headquartered Heidelberg specializes in ophthalmic diagnostic instruments based around optical coherence tomography (OCT), confocal microscopy, and scanning lasers.

2021 data breach

May 2023 saw EssilorLuxottica confirm that it had suffered a data breach two years earlier in 2021; upon noticing the breach, the company immediately alerted the FBI and Italian law enforcement. A spokesperson for the company stated that the company was first aware of the data breach in November 2022, and the owner of the website Have I Been Pwned? stated that around 77 million accounts were released.[31]

Operations

The company dominates the global eyewear market as the largest single player in that market.[32][33]

Retail

EssilorLuxottica is the largest company in retail sales, owning many of the largest eyewear retail chains in the world. By number of locations, EssilorLuxottica's largest store chain is Sunglass Hut, with 3,239 locations as of 2020. Its second largest and third largest chains are Oticas Carol at 1,402 locations and LensCrafters with 1,094 locations respectively.[34] Online, the company further owns Clearly, Eyebuydirect, FramesDirect.com, and online properties under its brand names such as Ray-Ban and Oakley.[35]

EssilorLuxottica retail brands by number of locations in 2020[34]
Brand name Number of locations
Sunglass Hut 3,239
Óticas Carol 1,402
LensCrafters 1,094
Vision Express 549
Pearle Vision 548
Target Optical 536
GMO 447
Salmoirgahi & Viganò 389
Oakley 384
OPSM 376
Ray-Ban 248
David Clulow Optical 123
All others 153

Eyewear brands

The company, inherited mostly from the Luxottica side, has control over some of the most recognized brands in eyewear. Previous acquisitions from Luxottica include Vogue Eyewear in 1990,[36] Persol in 1995,[37] Ray-Ban and Arnette in 1999,[38][39] Oakley and Oliver Peoples in 2007,[40][41] Alain Mikli in 2012,[42] and Bolon eyewear owner Xiamen Yarui Optical in 2013.[43] Essilor also brought some eyewear brands to the combined company, the largest of which being Foster Grant, acquired in 2010,[44] and Costa Del Mar, a part of Essilor since 2014.[45]

Despite ownership of brands, Luxottica also brought over exclusive eyewear manufacturing deals to the company, mostly with major European fashion houses. Armani was Luxottica's first major licensing deal in 1989, one that remains intact to this day,[46] and the company additionally manufactures eyewear for many companies, including but not limited to brands owned by Tapestry, Capri Holdings, Ralph Lauren Corporation, and Ferrari.[47]

In addition to the brands it owns, EssilorLuxottica presently has exclusive manufacturing licensing for Armani, Brooks Brothers, Burberry, Chanel, Coach, Dolce & Gabbana, Ferrari (through a Ray-Ban partnership), Michael Kors' eyewear, Miu Miu, Prada, Ralph Lauren, Swarovski, Tiffany & Co., Tory Burch, and Versace.[48] EssilorLuxottica also signed new licensing deals with Jimmy Choo and Kodak in 2023, though did not renew its license with LVMH-owned Bulgari, which expired at the end of 2023.[49][50][51]

Lens technologies

According to its website,[52] it owns the following lens technologies:

References

  1. ^ a b c d e f g "Universal Registration Document 2023". EssilorLuxottica. March 8, 2024. Retrieved July 18, 2024.
  2. ^ Ebhardt, Tommaso (June 22, 2023). "Del Vecchio's Holding Firm to Cash in Over $945 Million in Dividends". Bloomberg News.
  3. ^ "Eyewear Brands | EssilorLuxottica". Essilor. Retrieved August 31, 2023.
  4. ^ "EssilorLuxottica: revenue worldwide 2022". Statista. Retrieved August 31, 2023.
  5. ^ "Essilor et Luxottica annoncent une fusion à 50 milliards d'euros". Investir. January 16, 2017. Retrieved May 21, 2019.
  6. ^ "Essilor et Luxottica finalisent leur fusion, créant un nouveau géant de l'optique". Investir. October 1, 2018. Retrieved May 21, 2019.
  7. ^ "Essilor, Luxottica close €48B merger to create eyewear giant". www.spglobal.com. Retrieved August 23, 2023.
  8. ^ Zargani, Luisa (March 5, 2019). "Luxottica Delists From Milan Stock Exchange". WWD. Retrieved August 23, 2023.
  9. ^ WW, FashionNetwork com. "Luxottica Group starts procedure for New York Stock Exchange delisting". FashionNetwork.com. Retrieved August 23, 2023.
  10. ^ Prism, Optical (May 17, 2017). "Luxottica Group to delist from New York Stock Exchange". Optical Prism Magazine. Retrieved August 23, 2023.
  11. ^ "EssilorLuxottica contrôle désormais 93,31 % des actions Luxottica". Zone bourse. November 28, 2018. Retrieved May 21, 2019.
  12. ^ "16 milliards de CA pour EssilorLuxottica et des prévisions de croissance jusqu'à 5 %". Fréquence optic. March 8, 2019. Retrieved May 21, 2019.
  13. ^ "EssilorLuxottica fined for non-compliance in Turkey". globalcompetitionreview.com. Retrieved August 30, 2023.
  14. ^ Shedd, Karin (May 18, 2019). "Why the $49 billion merger of eyewear giants Luxottica and Essilor worries some antitrust experts". CNBC. Retrieved August 30, 2023.
  15. ^ Kar-Gupta, Sudip; Henault, Blandine (March 21, 2019). "EssilorLuxottica tensions exposed as executives fall out". Reuters. Retrieved August 31, 2023.
  16. ^ Wynne, Alex (March 21, 2019). "Merged EssilorLuxottica Plagued by Power Struggle". WWD. Retrieved August 31, 2023.
  17. ^ a b Borrelli, Silvia Sciorilli; Keohane, David (May 21, 2021). "EssilorLuxottica ends 3-year governance battle". Financial Times. Retrieved August 31, 2023.
  18. ^ "Essilor acquires German online optical retailer Brille24". Ecommerce News. February 13, 2019. Retrieved August 31, 2023.
  19. ^ "Essilor International moves forward with four worldwide acquisitions". www.healio.com. Retrieved July 19, 2024.
  20. ^ "EssilorLuxottica sets sights on retail dominance with $8 billion GrandVision deal". Reuters. July 31, 2019. Retrieved August 23, 2023.
  21. ^ "Ray-Ban's billionaire owner Leonardo Del Vecchio dies | CNN Business". CNN. June 27, 2022. Retrieved July 20, 2024.
  22. ^ Lepido, Daniele (August 1, 2022). "Ray-Ban Billionaire Del Vecchio Leaves $350 Million Essilor Shares to Successor". Bloomberg.com. Retrieved July 20, 2024.
  23. ^ "EssilorLuxottica Acquires 100 Percent of Shamir Optical". www.visionmonday.com. Retrieved July 19, 2024.
  24. ^ Borrelli, Silvia Sciorilli (July 25, 2023). "EssilorLuxottica to move into hearing aids after buying Israeli start-up | Financial Times". Financial Times. Retrieved August 23, 2023.
  25. ^ Wrobel, Sharon. "Maker of Oakley and Ray-Ban sunglasses buys Israeli hearing tech startup Nuance". www.timesofisrael.com. Retrieved August 23, 2023.
  26. ^ "EssilorLuxottica expands into streetwear with $1.5bn Supreme deal". Financial Times. Retrieved July 17, 2024.
  27. ^ "EssilorLuxottica to Acquire Supreme® from VF Corporation | EssilorLuxottica". Essilor. Retrieved July 24, 2024.
  28. ^ Anzolin, Elisa (July 17, 2024). "Ray-Ban maker EssilorLuxottica taps streetwear audience with Supreme deal". Reuters.
  29. ^ Rodriguez, Salvador (July 18, 2024). "Meta in Talks to Buy Stake in Eyewear Giant EssilorLuxottica". The Wall Street Journal. Retrieved July 23, 2024.
  30. ^ Rodriguez, Salvador (July 18, 2024). "Eyewear giant to buy majority stake in OCT diagnostics pioneer Heidelberg". Optics.org. Retrieved July 23, 2024.
  31. ^ "Luxottica confirms 2021 data breach after info of 70M leaks online". BleepingComputer. Retrieved August 23, 2023.
  32. ^ Knight, Sam (May 10, 2018). "The spectacular power of Big Lens | The long read". the Guardian. Retrieved May 13, 2021.
  33. ^ Parisi, Danny (May 16, 2019). "How independent eyewear brands compete with EssilorLuxottica". Glossy. Retrieved May 13, 2021.
  34. ^ a b "Number of stores of Luxottica by brand worldwide 2020". Statista. Retrieved September 5, 2023.
  35. ^ Lazarus, David (March 5, 2019). "Column: How badly are we being ripped off on eyewear? Former industry execs tell all". Los Angeles Times. Retrieved May 13, 2021.
  36. ^ "Strategy Study: How Luxottica Became The World's Eyewear Giant". www.cascade.app. Retrieved September 6, 2023.
  37. ^ Ortiz, Gerald; Moon, Jacorey (June 5, 2023). "The Complete Guide to Persol Sunglasses: All Styles, Explained". Gear Patrol. Retrieved September 6, 2023.
  38. ^ "Ray-Bans net cool $640 million in Luxottica sale - Apr. 28, 1999". money.cnn.com. Retrieved September 6, 2023.
  39. ^ Earnest, Leslie (January 7, 2000). "Arnette Retires From Company He Founded". Los Angeles Times. Retrieved September 6, 2023.
  40. ^ "Luxottica Acquires Oakley in $2.1 Billion Deal… | SGB Media Online". sgbonline.com. Retrieved September 6, 2023.
  41. ^ "Oakley Acquires Oliver Peoples - a Leading Fashion Eyewear Brand". GlobeNewswire News Room (Press release). February 9, 2006. Retrieved September 6, 2023.
  42. ^ Staff. "Luxottica Enters Into an Exclusivity Agreement to Acquire Alain Mikli". www.2020mag.com. Retrieved September 6, 2023.
  43. ^ Grint, Louie (February 26, 2014). "Luxottica Is Destined to Win in 2014". The Motley Fool. Retrieved September 6, 2023.
  44. ^ Essilor. "Essilor Acquires FGX International, Becoming a Major Player in a New Fast-Growing Market". www.prnewswire.com (Press release). Retrieved September 6, 2023.
  45. ^ Bolar, Alim (November 19, 2013). "Costa Inc. To Be Acquired By Essilor International | VisionPlus Magazine". Retrieved September 6, 2023.
  46. ^ "EssilorLuxottica, Armani Renew Deal Which Changed Eyewear World". Bloomberg.com. September 14, 2022. Retrieved September 6, 2023.
  47. ^ "Brands | EssilorLuxottica". Essilor. Retrieved September 6, 2023.
  48. ^ "Eyewear Brands | EssilorLuxottica". Essilor. Retrieved September 6, 2023.
  49. ^ EssilorLuxottica (June 29, 2023). "EssilorLuxottica and Jimmy Choo announce a ten-year licensing agreement". GlobeNewswire News Room (Press release). Retrieved September 6, 2023.
  50. ^ Schneider, Jaron (July 28, 2023). "Kodak is 'Indefinitely' Licensing its Brand to the World's Largest Eyewear Company". PetaPixel. Retrieved September 6, 2023.
  51. ^ WW, FashionNetwork com. "Luxottica and Bulgari are not renewing their eyewear license agreement". FashionNetwork.com. Retrieved September 6, 2023.
  52. ^ "Brands".
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