Prada, Chanel, Ray Ban: Find out how much do your sunglasses actually cost, and how Luxottica is making a killing...
Ever wondered why you find shades, sunglasses, goggles, eyewear selling at exorbitant prices. Find out the truth behind the business of overpriced eye gear and monopoly of Luxottica. This will make you think twice before you go to purchase your next Ray Ban, Chanel, Prada eye gear.
The eyewear business has surely captured the market like never before. The evolution of fashion taking place, step by step has rooted itself deeply into the society. You can see almost everyone wearing glasses/sunglasses to look cool and trendy which also costs them good amount of currency at times. The glasses give a fashionista appeal to the ones who wear and flash them.
But what if we tell you the actual cost of production in making those Ray Ban, Versace, Gucci, Ralph Lauren sunglasses is nothing compared to the selling price of the products, which are seen on display in showrooms, brand outlets, eCommerce websites and other shopping media. And at the same time, if we tell you all these major eyewear brands are collectively manufactured by one company, won't it just sound nonsensical?
But yes, this company by the name of Luxottica is the eyewear giant who makes eyewear for all these luxury brands like Prada, Chanel, D&G ,Burberry, Tiffany & Co. etc. CBS News exposed the role of Luxottica in manipulating the market.
Wearing glasses had never defined fashion and style like it does today.
Let's rewind back to a few years. In the earlier times of society, people used to wear glasses/sunglasses only if it had become a necessity for them due to vision problems.
People considered it as a symbol of flaw, in one person which was assumed to do something with the glasses bearer's vision.
It was only a few years back, Luxottica took these pieces of eyewear of medical purpose and transformed how the society looked at people wearing them. You could see celebrities wearing them all the time which set a trend among the people and redefined the statement of wearing glasses.
And in no time, it was out there with people wearing them all the time, of different styles and shapes, business of eyewear witnessed a breakout and it has been in the "cool list" since then because it was not seen like a necessity anymore, it was seen as jewellery for the face.
The story of Luxottica is something which the people need to hear. The marketing strategies, revenue development and their style in emerging as the biggest eyewear manufacturer of the world.
The Italian Company, Luxottica started as a tiny company located somewhere in the Italian Alps and has evolved so big that it claims at least half a billion people in the world are wearing their manufactured glasses/sunglasses.
Luxottica has reflected a lot of business thoughts in its commercial moves.
Ray Ban, nearly 30 years back went bankrupt and as such the products of the world's most selling eyewear had no appeal and charm in the market. It was taken over by Luxottica at that point of time and by stopping the availability of Ray Ban eyewear for almost a year, they re-introduced Ray Ban to the world in a refreshed and refurbished form.
And today, Ray Ban is the world's most wore eyewear.
Luxottica also happened to buy LensCrafters.
LensCrafters is an international retailer of prescription eyewear, and prescription sunglasses, and the largest optical chain in the United States, with about 90 stores in California alone.
Doesn't it imply that Luxottica has all the scope to play by their own rules. Being the giant manufacturer and retailer, Luxottica has driven the monopoly according to their speed limits.
Hasn't it ever occurred to you, that inspite of being a very competitive market of eyewear out there, you get to see prices which make you sweat at times? Well this aspect of Luxottica being the producer and the retailer at the same time makes them tag the prices collectively with no other nearby competition for them.
Luxottica not only owns LensCrafter, but also, David Cullow, glasses.com, Laubman & Pank, Sears Optical, Target Optical, Sunglass hut and the many other retailing companies.
Sunglass Hut is the world's largest sunglass retailing chain.
Oakley, which is famous for the sports eyewear used to be a competitor to the Luxottica collection and both the companies had a dispute over pricing issues which turned out to be terrible for Oakley.
Oakley was dropped from the Luxottica owned retail shops and within some time, since it couldn't reach out to the consumers, Oakley's stock price collapsed.
So Oakley which is counted as one of the best companies in eyewear was then bought by Luxottica too.
So technically, Luxottica owns Ray Ban and Oakley, which are the two biggest eyewear companies with several retailing shops including Sunglass hut, which has 2000 retail outlets in across the world in many countries.
The production cost generally involving an amount of $20-$30 per piece, is now sold in ranges starting from at least $500-$600 per piece.
Someone saw the game, came into the game and conquered the game it seems? Well, that 'someone' is definitely Luxottica.
Watch this CBS News video covering the statistics:
Sticker shock: Why are glasses so expensive?