The Reason Your Eyewear Is Expensive
Have you ever wondered why when you shop for branded sunglasses or eyewear from a reputable brand they carry a high price tag? There is one company that is responsible for that and they have a monopoly over the eyewear market.
Luxottica is an Italian eyewear company that does $8 billion dollars a year in revenue and boasts a large portfolio of great eyewear brands.
Luxottica owns 80% of the world’s glasses and sunglasses brands. They have a monopoly over the entire market.
They use this power and monopoly to set prices of glasses and sunglasses by inflating the prices as much as 20x.
Luxottica is ruthlessly competitve and will thwart away any competitor that comes its way. A great example of this is with Oakley. Oakley wasn’t owned by Luxottica up until 2007. Oakley was against Luxottica’s monopoly and disputed their pricing. Luxottica is so powerful that they even own these eyewear retail chains:
Luxottica pulled a power move on Oakley and decided to drop Oakley from these stores. After being dropped from over 7,000 stores; Oakley’s stock prices, market share, and sales collapsed.
To add salt to injury in the aftermath, Luxottica came in and “saved” Oakley by buying them out. The acquisition of Oakley added another great eyewear brand to Luxottica's portfolio of brands and allowed them continue to build towards their dominance in the market.
Takeaway: You can hate it or love what Luxottica has built. From a business perspective, this is an entrepreneur's dream. Luxottica is a vertically integrated company that makes it near impossible to compete with. How would you compete with a company like this?