In March, tensions between Essilor, the major French lens maker, and Luxottica, the equally major Italian frame maker, erupted following a dispute over the merger of the two companies created in 2017. The two sides have publicly accused the other of trying to dominate the joint company in their continued search for a CEO. This week, an agreement was reached, deflating those tensions.
The merger has made EssilorLuxottica the undisputed titan of the eyewear industry. Both companies were already dominant forces in the eyewear business. Essilor controls nearly 45% of the lens market and Luxottica 25% of the frame market. Now that they are joined, the new company’s control over global eyewear is closer and closer to a monopoly. The company owns dozens of brands, like Oliver Peoples, Ray-Ban and Oakley, retailers like Sunglass Hut and LensCrafters, and vision insurance companies like EyeMed Vision Care.
EssilorLuxottica also owns dozens of brand licenses, producing eyewear for the Armani, Versace, Burberry and Dolce & Gabbana brands, to name a few. The closest comparison to their dominance is a company like Coty, which has nearly 80 brands in its portfolio of licensed perfumes.
Despite EssilorLuxottica’s stranglehold on the market, independent brands continue to appear. According to Euromonitor – even with the massive success of Warby Parker, one of the biggest DTC disruptors in all of retail, let alone eyewear, with a valuation of nearly $ 2 billion – the global eyewear market is expected to reach $ 136 billion by 2021., with just 2% of that total coming from DTC brands.
For New Orleans-based independent eyewear brand Krewe, the smaller scale allows for a more intimate relationship with customers than can be achieved by Luxottica.
âWe have a big event here every year in New Orleans called Krewe Fete, and we bring a lot of our global retailers through a program called Royalty. This is a tiered program for our retailers, where the more Krewe they sell, the more we want them to engage with the brand and see the brand and its base, âsaid Stirling Barrett, Founder and creative director of Krewe. âIt’s something unique that you can’t do at a trade show, regardless of your size. There are areas where being small and nimble makes you more interesting. We have found that we can be successful when we deliver a great product with a great design, tailored to our clientele and consumers in a way that is unique and more meaningful than the behemoth can do. Even with them on the throne, we managed to find market share.
The real advantage of Luxottica, in the opinion of optometrist Myles Zakheim, co-founder of eyewear brand Zak, is that it has saturated the market so much that it is essentially the default option when ‘a consumer is looking for glasses. With over 9,000 outlets, including mainstays like Sunglass Hut, LensCrafters, and Target Optical, someone who doesn’t think too much about where they want to buy their glasses will almost certainly end up getting something from Luxottica.
âI have been doing business with Luxottica for 25 years,â said Zakheim, referring to his eye care center, Optometrix, which offers Luxottica products in addition to offering eye exams and health services. âThey have one goal in mind, which is to take over the world. They say, ‘If you want to come and join us, we’ll be partners, but if not, we’ll eat you alive.’ “
However, there is a growing contingent of customers who are actively rejecting Luxottica due to its aggressive market coverage, according to Kyly Zak Rabin, co-founder of the eyewear brand and Zak retailer. Zak, which manufactures and sells, online and offline, its own non-Luxottica eyewear and eyewear collections. While most companies would probably prefer to play on their size and dominance, Luxottica downplayed how dominant it is, aware that its control of the global glasses is often characterized as monopolistic and could give them bad press.
âWe’ve seen people walk into our store and say, ‘I don’t want to see any Luxottica products,’ Rabin said. âFor millennials in particular, transparency becomes very important. Consumers make choices around what is transparent and what is sustainable. There is a real level of care and worry that just wasn’t as prevalent before. “
But rather than clashing with a company that has immense resources, some brands have chosen a different path: to go where Luxottica is not.
âI don’t think I’m in direct competition with Luxottica at all,â said Alex Baker, co-founder of new eyewear brand DTC FÃ©roce. âThe goal for me was to see a gap in the market, between the pair of glasses over $ 300 and the pair of $ 50 to $ 100 that did not have the quality. I also think that because I am the owner and designer of the collection, there is a much more personal aspect. Customers love to know that there is a person behind it all, as opposed to this giant conglomerate pumping out stereotypical stuff. Because everything is DTC, I can have a much closer relationship with my clients. There is a lot of value in there.