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Charting New Territories

Al Berg and his team at Marchon have built America's biggest eyewear firm with the focus on being American.

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WWD Milestones issue 07/01/2008

When Al Berg and his partners Jeff White and Larry Roth founded Marchon a quarter century ago, the eyewear market was bleak.

There were few designer brands and eyewear was more of a utilitarian tool rather than a fashion accessory.

But Berg and his comrades had big ideas. Their mission was to create an American company that would define the industry. Twenty-five years later, Marchon has become a leader in the market — not to mention a $500 million company.

Berg, chief executive officer of the firm, is a native of Great Neck, N.Y., with a background in the fashion industry, having family in the textile business. After attending Syracuse University and Harvard Business School, Berg joined Avant Garde Optics in 1981. In 1982 the brand (which was owned by Jeff White’s parents, Ruth and Frank White) was sold to Luxottica, the Italian eyewear giant.

“We started with a bang,” said Berg recalling the launch with Roth and White in 1983. “We knew the market, we were young and we had the contacts. We started the company with the purpose of distributing products in America. Europeans used U.S. distributors at the time.”

The partners had the plan and company strategy laid out. “That was the easy part,” said Berg. The hard part, he said, was the name. “We wanted something that meant something to us, something that was easy to pronounce, something that sounded a little French. Marchon means ‘march on.'”

Roth continues at Marchon as executive vice president; White died in 2005.

What differentiated Marchon from the competition — including industry leaders Safilo and Luxottica, both Italian firms — was being American. Other competition hailed from Germany, France and Japan. In the Sixties, the eyewear industry was made up of wholesalers. Factories would sell to the wholesaler, which would sell product to the retailer. In the late Seventies, European factories started creating trend-right product, though it wasn’t branded. The few brand names in the market included Diane von Furstenberg and Christian Dior.

In the mid-Eighties, Luxottica charted new territory when it signed on to create eyewear for Giorgio Armani; Berg was keen on bringing Marchon into the new designer eyewear arena.

It was in 1988 that the company moved its offices from Plainview, N.Y., to a 100,000-square-foot distribution center in Melville, N.Y., where its headquarters is today.

The next few years proved fateful for the company. As Calvin Klein was visiting his optician, he inquired about the eyewear business. He had had an eyewear license with another company, but it never took off. Klein’s optician suggested the designer meet with Berg, an industry veteran. In 1992, Calvin Klein signed a licensing deal with Marchon that would forever change Berg’s life. “We signed Calvin and all of a sudden you had an industry change,” said Berg. “The whole concept of being a license, that was really at the beginning. We had to convince licensors to get in the business.”

The Calvin business helped propel Marchon into international territories. The demand for Klein goods was so strong the world over that Marchon started opening satellite offices in Europe and elsewhere. Klein frames became available in over 80 countries.

Klein himself was very involved in the design of the frames. He insisted Marchon work with his colors and shapes for the season. The company also produces ck and Calvin Klein white label eyewear.

“It was challenging, but Calvin knew it,” said Berg. “He was very clear on what was Calvin and what it wasn’t. He didn’t want a logo, he wanted brand identity.”

As other companies got into the licensing game, Marchon’s stance was distinctive: the American brand, with an American philosophy. “We were coming from a different paradigm,” added Berg.

To this day, Marchon is the largest American eyewear conglomerate with 18 satellite offices across the globe including Austria, Mexico and South Africa. The firm has 350 salespeople. In the U.S the business is 60 percent sunglasses, 40 percent optical. Internationally, the mix is 50-50.

Marchon also began to focus on technology. The strong and lightweight Carbon Fiber Graphite frame, launched in 1986, was the company’s first patented product. The firm sourced in Italy and France and later Japan, where the Autoflex technology behind its memory metal Flexon frames was invented. Today there are over 200 styles made using Flexon, which launched in 1987.

“Other competitors wouldn’t have thought of that,” said Berg. “They thought they had to produce it in their own factory.”

Marchon also develops software for optometrists’ offices called Office Mate Software Solution.

In the late Nineties, Marchon built its first two factories, in China and Italy, respectively.

“Our business was getting sizable,” said Berg. “[Building factories] helped ensure supply and helped us focus on product innovations. It started giving us the insight to being a production company.”

Marchon also opened its retail division to service top-tier and better department stores as well as specialty stores. The firm owned a Manhattan showroom, which was recently renovated and expanded to include design and development teams.

The company soon took on additional licenses, including Disney, Nautica, Coach, Oscar de la Renta, Michael Kors, Sean John and, most recently, Karl Lagerfeld and Pucci. De la Renta, it should be noted, is produced by Allure, Marchon’s private label division.

For Nike, which signed on in 2000, Marchon got into the sport optics business and launched the Nike Max lens technology, among other proprietary innovations geared toward athletes.

Many of the brands on Marchon’s roster are American. “We’re an American company, and to other American companies we’re viewed as local,” said Berg. “Because I’m American, I’m more plugged into American brands because I see them more.”

To Marchon’s credit, many industry insiders contend that the firm stays true to its licensor’s aesthetic, no matter the cost.

John Idol, ceo of Michael Kors (USA) Inc. knew Berg from the days when Idol presided over the Donna Karan brand and Marchon produced Karan’s eyewear. “Al Berg is truly one of the visionaries, not only in the eyewear industry, but in the fashion industry,” said Idol. “When I first joined Michael Kors [in 2004], one of the first people I chose to partner with was Al Berg. Michael Kors was a $70 million business worldwide….he was very instrumental in taking us to the $500 million [level].”

Due to the wide distribution of the Kors eyewear, the designer experienced increased brand awareness, which helped propel his overall business.

Kors shows eyewear on his runways in fall and spring and is credited with bringing the aviator silhouette into the fashion lexicon. Details on the glasses — such as chain-link or hinge hardware — go back to key bags in the collection.

Oscar de la Renta’s ceo Alex Bolen said that eyewear is one of the company’s fastest-growing businesses. “Al is incredibly passionate about the eyewear business,” Bolen said. “He’s very much like us — concerned about high quality. He has a lot of integrity.”

Coach president and executive creative director Reed Krakoff added, “Eyewear has been a great addition to our business. It adds sexiness and a prettiness that plays off really well. It’s not only added sales, but attitude and look.”

Referencing Coach, Kors and Lagerfeld, Berg said, “It’s wonderful working with these masters. We can apply their philosophies to all our processes.”

With all this success behind the company, is Berg considering an IPO?

“We’ve looked into it,” he said. “Yes, it is one of the alternatives on the table. [It won’t happen] immediately, but it’s been discussed and will continue to be discussed.”

Highlights From 25 Years of Marchon

1983 – Marchon is founded by Al Berg, Larry Roth and Jeff White.

1987 – Having obtained a patent for Flexon, a flexible metal, Marchon launches the first Flexon frame, dubbed the Autoflex I.

1988 – The company moves from Plainview, N.Y., to its current headquarters in Melville, N.Y.

1993 – A visit to the optician yields a business partnership for Calvin Klein and Marchon, and the company joins the fashion licensing brigade with Calvin Klein Eyewear.

1998 – Sporty looks from Nautica become part of the Marchon family.

2004 – Ellen DeGeneres zips onto the set of her namesake talk show in style on a customized Coach Vespa. (Coach and Marchon partnered in 2002.)

2004 – The same year Michael Kors makes his debut on “Project Runway,” Marchon launches the Kors eyewear collection with the aviator-loving designer.

2004 – Upper East Side ladies now have shades to match their patrician dresses, as Oscar de la Renta launches with Allure eyewear (Marchon’s private label division).

2005 – Glitz and double-F logos abound as Marchon goes international with its Fendi license.

2007 – Sean John eyewear is added to the Marchon stable.

2007 – The first Emilio Pucci frame hits the Milan runways, accompanied by a cut-down-to-there bathing suit.

2007 – Marchon nabs a license with Karl Lagerfeld.

2008 – Marchon celebrates its 25th anniversary with a special frame.

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