With the dust settled following a top management shake-up late last year Luxottica is now eyeing growth on three fronts. The Italian eyewear giant …
With the dust settled following a top management shake-up late last year Luxottica is now eyeing growth on three fronts. The Italian eyewear giant is looking to a stronger retail network, e-commerce, and increased luxury sales in Asia-Pacific and North America to build on an 18% profits jump to €643m ($719m) in 2014.
Ambitious? Well, there’s also the not so little aim to double total sales over the next 10 years from 2014’s €7.65bn.
After an uneasy top end transition that saw co-CEOs Massimo Vian and Adil Mehboob-Khan eventually replace long-time boss Andrea Guerra, 2015’s priorities were laid out Monday – no doubt under the guiding hand of founder and president Leonardo Del Vecchio.
“We’re looking at potential white spaces,” Mehboob-Khan told Dow Jones, with retail unit Sunglass Hut and sports brand Oakley key.
Mehboob-Khan noted the Oakley eyewear brand is much better known in the US than elsewhere so the company is now trying to “raise its awareness outside North America,” he said.
And let’s not forget its partnership with tech giant Intel to experiment with electronics and wearable technologies. The first related product from the multi-year collaboration is expected to be launched this year. And with 2015 dubbed by some as the year of wearable tech, that’s a project that will be closely watched.
For Sunglass Hut, Luxottica plans to add about 1,000 stores in the next few years to its existing 3,000, to tap into the increasing number of potential sunglass customers. Brazil, India and Southeast Asia are some of the areas where stores will be opened, the CEOs said.
But Luxottica’s main business remains in North America, which accounts for more than half of overall sales. “It’s our core market,” said Vian.
Sales in the US grew over 5% in 2014, and 12% year-on-year in the last quarter, boosted by favourable currency effects.
But there is still a high potential, as “Americans’ inclination to buy luxury goods items is increasing significantly,” Vian said. Currently, the vast majority of Americans buy eyewear that cost less than $50, Luxottica estimates, while the Italian firm mainly sells sunglasses costing more than $200.
Luxottica estimates that the US eyewear market will be worth $47bn in 2020, compared with $35bn in 2013.
“Even department stores are realising the eyewear potential,” Vian said, noting they generally have started to dedicate a larger selling space to the product.