MILAN — The global eyewear market is expected to reach around 155 billion euros in 2024, posting compound annual growth of 5 percent, according to studies by Euromonitor, Worldwide Luxury Market Monitor by Bain & Co. and Altagamma. At wholesale, the high-end frames and sunglasses business is valued at around 3 billion euros.
Within this context, major changes have rocked the industry, ranging from the merger of two giants, Luxottica Group and Essilor, to the decision made by Kering and LVMH Moët Hennessy Louis Vuitton to bring production in-house. The latter in 2017 formed a joint venture with Marcolin Group called Thélios.
As a consequence, Italian eyewear companies are reviewing their strategies, adapting to the times while also forging new paths. Challenges await Safilo, which in December presented its 2020-24 business plan and which expects to lay off 700 employees. The company has been hard hit by LVMH’s decision to, from 2021, take on the production of the Dior and Fendi brands, two longtime Safilo licenses. Realigning Safilo’s industrial footprint is key as the group expects to see its production volumes in Italy to drop by almost half over the next two years, according to chief executive officer Angelo Trocchia.
As per the restructuring, the Martignacco factory will close from January, with 250 people let go. The Longarone plant and the Padova headquarters will see the exit of 400 and 50 employees, respectively. Safilo employs 6,500 people globally, including 2,600 in Italy.
The LVMH and Kering choices “change the strategic context,” said Trocchia, and Safilo is working on a more stable balance of labels, resizing the luxury division and investing in its own proprietary brands, from Carrera to Polaroid. Safilo will also continue to produce 1.8 million pieces a year for Kering until 2023.
On a positive note, Safilo in December acquired a majority stake in the California-based digitally native Blenders Eyewear, which is expected to help boost the Italian group’s online business. Downsizing in the luxury segment, Safilo is also leveraging a group of new licenses with Levi’s, Under Armour and David Beckham.
By 2024, Safilo expects licensed and owned brands to be more balanced, each accounting for 50 percent of the business, and to gradually shift to an increased weight of prescription frames.
Marcolin Group is also investing in optical. Ceo Massimo Renon noted in November that aging and the excessive use of technology, from smartphones to computers, are accelerating the need for prescription glasses and boosting this market segment. “Sunglasses are seasonal and linked to fashion and trends, and more subjected to fluctuations,” he contended.
Marcolin is revisiting its pool of licensed brands, forging ahead with a product-driven strategy. In November, Marcolin signed a five-year licensing agreement with BMW Group, which followed the recent additions of Bally, Adidas, Sportmax, Max & Co. and Los Angeles-based brand Barton Perreira, diving into the specialty eyewear market, and Swatch Group Ltd. for the production and distribution of the eyewear collections of watch labels Longines and Omega. According to Renon, Marcolin’s “vision is to build a complementary portfolio that is not only fashion and apparel.”
The Longarone, Italy-based company’s portfolio of labels comprises around 30 brands, ranging from Tom Ford, Moncler and Ermenegildo Zegna to Tod’s, Swarovski, Guess and Diesel, to name a few.
Renon believes companies have increasingly been investing in their own brands, ticking off Luxottica-owned Ray-Ban or Safilo’s Carrera and Polaroid. The executive also believes there will be further consolidation and competition between giants. “I don’t think the scenario in five years will be the same,” he said.
To ensure a future for the country’s eyewear district and the sector, Marcolin has also invested on training, as the segment faces a scarcity of new qualified and skilled artisans.
Kering Eyewear has been investing in the territory as well and last fall inaugurated a new logistics center in Vescovana, near its headquarters about an hour away from Venice as president and ceo Roberto Vedovotto touted the growth of the company he set up in 2014, launching a new business model.
Today, Kering Eyewear develops and distributes collections for 15 brands: Gucci, Saint Laurent, Bottega Veneta, Alexander McQueen, Stella McCartney, Alaïa, Brioni, Boucheron, Pomellato, McQ and Puma. In March 2017, Compagnie Financière Richemont became a stakeholder in Kering Eyewear, which led to the production of Cartier eyewear. Collections for Montblanc, Courrèges and Balenciaga have been added since January last year. From 33 employees in December 2014, Kering Eyewear now has around 1,300 employees, of whom 60 percent are women. Out of the total, 55 percent hail from countries outside Italy.
A sign of Kering Eyewear’s expansion and development, the fully automated logistics center covers 162,000 square feet and allows the company to stock more than five million pieces and to carry out more than 4,000 shipments a day. A greenfield project, it employs 170 workers in logistics and quality control activities.