“With the global eyewear market, which includes frames, contact lenses and sunglasses, expected to reach $140 billion by 2020, the opportunity for one of the world’s largest luxury groups is vast…..” (BOF, Oct 2016)
Ever since the announcement of Luxottica & Essilor merger released in January 2017, we have seen changes in how luxury brands manage their eyewear development. As Luxottica “has licensing agreements to create eyewear for major fashion brands, including Burberry, Dolce & Gabbana and Versace” and with Essilor, these two firms combined will be worth about 46bn euros (£40bn; $49bn). (BBC, Jan 2017)
When the announcement between Italian owned Luxottica & French lens maker Essilor have been released, in February 2017 LVMH have also entered into a joint venture with Italian eyewear manufacturer Marcolin.
In March 2017, Kering also have “announced a strategic partnership with Richemont to handle the development, manufacturing and distribution of Cartier eyewear” (BOF, March 2017).
What’s more interesting is that this move by Kering however does not surprise us because we have been looking forward to the movement in projects and partnership between brands since Kering “finalises its partnership agreement with Safilo, covering the product development, manufacturing and supply of Gucci eyewear products in Juanuary 2015” (Kering Press Release, Jan 2015).
By internalising the eyewear production for its brands including Gucci, Bottega Veneta, Yves Saint Laurent, Alexander McQueen and Stella McCartney, Kering have created a new entity named Kering Eyewear SpA.
Taking power back to its own hands Kering attempts to operate like a “start-up” rather than a traditional luxury group as they are able to respond faster to market needs and demands allowing them full capacity to practice and explore new opportunities.
Looking at Kering’s partnership with Cartier eyewear, it is by far “Kering Eyewear’s first external deal since setting up operations in 2014 to take more control over Kering brands’ eyewear.” (BOF, March 2017).
The recent movement in Eyewear industry further proves that “It’s a business in which scale is important and so joining forces together is interesting.” (BOF, March 2017).
What will this mean for independent brands like Prada, Armani and Chanel?
And what are the obstacles and challenges these luxury brands face when working together in joint venture?