MILAN — Leonardo Del Vecchio, founder of Luxottica Group SpA, told investors and analysts at a presentation on Wednesday that he plans to return to a non-executive chairman role “in a few years, leaving the company in the hands of managers grown within the company.”
Speaking in a video message from Asia to the attendees convened at Reggia Venaria, outside Turin, Del Vecchio said that he did “not know of any other way to impress this new entrepreneurial impulse than to risk in person taking responsibility for the 80,000 employees, the market and shareholders.”
In January, Del Vecchio once again assumed executive responsibilities with chief executive officer Massimo Vian upon the departure of Adil Khan. After only one year, Khan left his role as ceo for markets. Vian continued to hold his role as ceo for product and operations. The two ceo positions had been created on the heels of former ceo Andrea Guerra’s abrupt departure in September 2014.
Del Vecchio characterized the current management structure as “a new phase marked by an innovative strategic vision, speed of execution and organizational simplicity.”
In his message, Del Vecchio, who will turn 81 in May, said the key points of the acceleration are a new division of duties that brings simplicity and speed of execution, global e-commerce supported by important investments in technology and communication and the development of lenses that “is worth as much as the market of frames and with very high margins.”
“Since I returned to the company, I realized that, in many areas, more must be done and better, not only for short-term results, but to consolidate our global leadership in the future and maintain it sustainably in the long-term,” he said.
He took the time to reassure analysts and investors “that the governance of this great company is today in excellent hands. I promise that the group will be left to managers grown in the group, skilled and in love with Luxottica with a strong and independent board, such as the current one, and a president in the Anglo-Saxon way as a guarantee for all shareholders.”
Releasing year-end results on Tuesday evening, which showed gains in profitability and revenues, as reported, the Italian eyewear firm’s board appointed Francesco Milleri a group director, “tasked with assisting the executive chairman in carrying out the various functions associated with his current role.” Outside consultant Milleri is a longtime friend of the family.
At the investor and analysts day, Vian said this was an “opportunity to work closely with the founder. He keeps pushing the status quo, to test and experiment the business model.” Vian said that the goal is to “invest in the organization and grow the talent pipeline.”
Vian said that 2015 was “volatile but not for us,” and underscored the group’s “diversity of brand portfolio.”
The company is on track in its goal to reach revenues of 15 billion euros, or $16.3 billion at current exchange, by 2024, he said. Last year, adjusted net sales were up 17 percent to 9 billion euros, or $9.8 billion. At constant currencies, the sales increase would have been 5.5 percent.
In the next two years, e-commerce will represent around 7 percent of total sales and net margin will be above 10 percent by 2017, said Vian. In 2016, sales are expected to gain between 5 and 6 percent.
In the presentation, Vian highlighted Oakley Prizm, the patented lenses enhancing contrast and visibility on outdoor activities, such as cycling, skiing and golf. “They are unbelievable,” he said. “The nano-technology is exclusive and you go faster.” He also spoke of the Oakley Radar Pace, the first smartglasses to be a result of the Luxottica and Intel collaboration, and presented in Las Vegas at the CES trade show in January. “It’s a voice-activated, real-time coaching system,” he said. The products will be launched at the Olympic Games in Rio.
In light of the partnership with Google, “we decided six months ago to start an R&D office in San Francisco, a small office, for a Luxottica presence in Silicon Valley. Scouting for all digital opportunities, it’s an important step in digitalization that we have embraced,” explained Vian.
In 2016, the company will accelerate capital expenditures to over 6 percent, opening and remodeling 500 stores, doubling investments in digital transformation, innovations cap and in innovations capacity and supply chain.
Vian said that “January and February are on track,” and that Luxottica is getting ready to unveil its projects with Macy’s, Target and Galeries Lafayette.