Italian eyewear giant Luxottica to buy Brazilian optical chain Oticas Carol
31 January 2017
Italian eyewear giant Luxottica Group S.p.A. yesterday struck a deal to buy Brazilian optical chain Oticas Carol for €110 million ($117 million) in order to expand in the South American country.
The deal comes a two weeks after French lensmaker Essilor International agreed to acquire Luxottica, for about €22.8 billion ($24 billion) in stock, in order to become the world's largest player in the €95-billion eyewear market. (See: French lensmaker Essilor to buy Italy's Luxottica for $24 bn) Oticas Carol, owned by investment funds 3i Group, Neuberger Berman and Siguler Guff & Company and others, is one of the largest optical franchisors in Brazil selling both prescription frames and sunglasses.
The São Paulo-based company has expanded its retail footprint from around 500 stores in 2013 to 950 in 2016 and has annual revenue of around €200 million.
Post closing, Luxottica will enter into the optical retail business in Brazil, a region with excellent growth potential in eyewear.
Luxottica currently operates a network of Sunglass Hut stores in Brazil and has a solid presence through its wholesale business and a manufacturing plant in Campinas.
"Brazil is a great country, one we have believed in and operated in for 25 years,'' said Leonardo Del Vecchio, executive chairman of Luxottica. "With this transaction, we take one step further in completing our vertically integrated business model, which has shown many benefits for all our consumers".
Ronaldo Pereira, CEO of Óticas Carol, said, "The transaction brings Carol to a whole new level. Our franchisees will belong to a global eyewear company, which brings them a greater sense of security to continue to grow and invest in our brand. Now we have all the necessary tools to move forward with our expansion plans''.
A low-key company, Luxottica dominates the global eyewear market by buying out its rivals.
It makes prescription frames and sunglasses and owns brands like Ray-Ban, Oakley, Vogue Eyewear, Persol, Oliver Peoples and Alain Mikli, as well as highly attractive and prestigious licenses including Giorgio Armani, Burberry, Bulgari, Chanel, Dolce & Gabbana, Michael Kors, Prada, Ralph Lauren, Tiffany & Co., Versace and Valentino.
Started in small tool shop by Leonardo Del Vecchio in Agordo, Italy in 1961, Luxottica now has an annual turnover of €9 billion. It sold 65 million pairs of frames last year.
With over 65,000 employees, Luxottica operates in over 150 countries, has 7,400 stores, and six production facilities in Italy, three in China, one in Brazil, one in the US and a small plant in India.
The company's products are designed and manufactured at its six plants in Italy, two wholly-owned plants in the China, one each in Brazil and the US.
It acquired Ray-Ban in 1999 and managed to turn the $29-a-pair gas station brand into the world's top-selling sunglasses.
Its own brands include Oakley, Persol, Oliver Peoples, Arnette, REVO, Vogue and K&L (formerly Killer Loop).
The New York and Milan Stock Exchanges-listed company also makes 20 licensed brands for some of the best known names in the global fashion and luxury industries, including Burberry, Polo Ralph Lauren, Stella McCartney, Tiffany, Versace, Vogue, Miu Miu, Tory Burch and Donna Karan.
Apart from making glasses, Luxottica also owns nearly every major retail outlet that sells eyewear, including prescription eyewear chains LensCrafters and Pearl Vision. It also owns Target Optical, Sears Optical, Sunglass Hut - the world's largest sunglass chain and EyeMed, the second-largest vision care insurer in the US.
Due to lack of competition, Luxottica routinely sells eyecare glasses at over $200 although it cost less than $30 to make.
It has recently partnered with Google to develop internet-connected Glass eyewear called Google Glass and integrate it into Luxottica's eyewear.