Essilor’s CEO talks Luxottica deal
Hubert Sagnières, the chairman and CEO of Essilor, thinks that the $50 billion mega-deal the company signed with Luxottica earlier this year can make up for lost opportunities. The logic behind it is simple: Luxxotica makes almost all the frames, has access to a network of retail outlets, and commands the eyewear market. But Essilor is the market-leading lens maker. Combining the two propositions will create a company that has complete control, from inception to sale.
Luxottica’s share price is up 15% so far this year
SOURCE: Yahoo Finance
According to Mr. Sagnières, an estimated 2 billion people worldwide wear corrective lenses. And half of them use lenses created by Essilor. This is a figure that competes with some of the biggest customer bases on the market – Facebook now has 1.9 billion users; WhatsApp has 1 billion. Of this huge market, Sagnières says: “There are still a few billion we do not have. It gives us something to strive for”.
Corrective lenses are not a niche market – as our eyes age (presbyopia is the official term), almost all of us will require glasses to correct decline in our vision. In a world with a population that is both growing and ageing, that suggests huge possibilities for growth.
Sagnière sees the merger between Luxottica (which has 14% of the $100 billion global eyewear market) and Essilor (which has 13%) as a powerful way to capitalize on that growth. He told the financial times: “There was nothing broken at Essilor. But we were missing the opportunity. We were missing so much of the market. The Luxottica frames with our lenses will be a hugely powerful force.”
Luxottica’s CEO, Leonardo Del Vecchio, agrees: “We have the brand. What was missing was the quality of the lenses.”
Dominion holds Luxottica in its Global Trends Luxury Fund.
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