Aside from the blaring notes of Prince’s “Kiss” seeping out of a disco bar in the heart of Belluno, at 9 p.m. the tiny cobblestone streets are deserted.
For the natives, the town’s sleepiness is normal. “People here work very hard; they clock in long hours so they go to bed early,” said Antonio Zandegiacomo Copetin, secretary of Sipao, the association that represents the eyewear manufacturers from the Belluno district, where two-thirds of the eyewear sold around the world originates.
Proving him right is the sign posted outside the gates of Luxottica’s headquarters in Agordo: Factory hours are 5:45 a.m to 7:30 p.m.
This tireless approach to work, along with an elastic business mentality, farsighted strategies, an innate sense of aesthetics and a near-manic attention to quality, is the formula that triggered what the Italians call “the miracle of the Nord Est,” referring to that part of Northern Italy sandwiched between Venice and Verona. The area, 3 1/2 hours northeast of Milan, is also one of Italy’s richest areas in terms of productivity. With one company per every 11 inhabitants in the Belluno district, unemployment is practically nonexistent.
According to Sipao’s statistics, in 2000, the district, which includes Belluno and Cadore, the mountainous area surrounding Belluno, counted 170 eyewear manufacturers employing 13,500 people and generating sales of $1.6 billion. Exports account for 60 percent of the pie, with the U.S eating up a 41 percent share.
Scattered around this valley — where on a sunny day, the snowcapped Dolomites jut up like sharp teeth against the cobalt blue sky, and where Cortina d’Ampezzo, the jet-set ski resort, is only a windy 60-kilometer drive uphill — is a constellation of eyewear manufacturers. They vary in size from the publicly listed major players that claim most of the designer licensees — Luxottica, Marcolin, De Rigo — to a flurry of smaller companies, often run by artisans. They either turn out full-range eyewear collections — last year Luxottica churned out 31.6 million frames — or they specialize in components, since it takes 30 pieces, often of Lilliputian dimensions, and 50 steps to make a pair of glasses.
Fedon Giorgio & Figli applies the same care to making eyeglass cases, and with an annual production of 40 million cases, the company supplies all levels of the business: top fashion brands, in-house brands and cases for technical sports frames. Founded in 1919, the public company is now run by fourth-generation members of the Fedon family. And then there’s Safilo, the licensee of Gucci, Valentino, Polo Ralph Lauren and Allison, which is based in the nearby city of Padova. Safilo’s main production plant sits on the same site where, in 1878, Angelo Frescura and brothers Giovanni and Leone Lozza built the first eyewear factory in 1878 on the banks of the Belluno valley’s Molina River.
“It’s a number of things that make this district so exceptional: a high specialization, an amazing work ethic, an unparalleled know how and a knack for quality,” said designer Gianfranco Ferre. “It’s a package that you don’t put together overnight or in one generation, for that matter. If the industrialization of the sector is recent history, the artisanal connotation dates back to the Venetian Republic. The excellent technology of today boasts ancient roots that are solid and noble, like the soul of the Veneto region.
“This area boasts an unique example of entrepreneurial capacity and a way of doing business without infrastructures or welfare aids. Our success stems from the people’s tenacity and creativity and the desire to always go forward,” said Maurizio Marcolin, chief executive officer for licensing, marketing and business development at Marcolin Group, a company whose licenses include Dolce & Gabbana, D&G, Replay, Chloe, Costume National and Roberto Cavalli. He added that in the last four years the scene has changed, with stiffer competition resulting in the weeding out of some of the smaller companies. “Those companies that first understood the potential of designer licenses, verticalized their production and opened subsidiaries abroad, are now global players,” he said.
Even in adverse economic climates, these companies continue to post double-digit gains and always have an ace up their sleeve to stay ahead of the game: Luxottica acquired the Sunglass Hut International retail chain, partly as a means of tapping into consumer trends; De Rigo snapped up George Clooney to pose for its in-house Police brand and successfully boosted brand awareness; Marcolin is adding the finishing touches to its tailor-made titanium frames for Dolce & Gabbana, and in spring, Allison will unveil Gianfranco Ferre’s seriously luxurious made-to-order 18-karat gold frames, sprinkled with diamonds and carrying a $3,000 price tag.
The Italians can also be credited with making a pair of shades as hot as Louis Vuitton’s Stephen Sprouse-decorated graffiti bag or a pair of YSL stilettos — thanks to a carnival of fashion-forward embellishments, including rhinestones, crystals, mother-of-pearl treatments and crocodile skin insets, and a rainbow of colors and shapes that range from sporty goggles to Seventies-inspired numbers.
But it wasn’t until the Sixties that business grew exponentially, peaking in the Eighties with the craze for designer frames. In fact, Cadore’s successful businesses were the subject of a study by an international team of economists and sociologists.
“This [Cadore] was a poor mountainous area, so the inhabitants packed their suitcases and headed north to Austria, France and Germany, where most of the eyewear production was concentrated,” said Roberto Chemello, chief executive officer at Luxottica. “But their dream was to come back and set up shop here.”
Renato Sopracolle, whose small company specializes in metal frames, added that after the first couple of factories cropped up in the Sixties, a bunch of offshoots quickly sprouted, marking the beginning of an Italian industry that initially nipped at the heels of Germany and France, but quickly overtook their production. “The boom of the Italian eyewear production coincided with the crash of German and French production,” said Chemello.
Indeed, those countries have yet to catch up. According to a research by analyst Carlo Pambianco, of the 334 licensed eyewear brands in the world, 179 are in the hands of the Italians; France has 68 brands and Germany, only 19.
Luckily for the Italian eyewear industry, the perception of glasses has changed dramatically since the last century, when spectacles were an embarrassment and much ingenuity was used to disguise them. Tiny spectacles, for example, were designed with a headband that allowed them to be partially concealed beneath one’s wig. A museum called Pieve di Cadore showcases the historical evolution of eyewear, from pince-nez to lorgnettes (opera-style glasses mounted on a long metal rod) and to modern wire rims. These days, though, Italian manufacturers have nothing to hide. When it comes to translating designers’ creative whims into functional accessories, Luxottica leads the pack, and its exemplary business performance continues to confound even seasoned analysts.
For the period ending Dec. 31, 2001, Luxottica’s net profits jumped 23.9 percent to $272.5 million on sales of $2.6 billion, which in turn were up 26.8 percent from 2000. The world’s largest eyewear company said operating profits rose 23.8 percent to $440.4 million. (All figures are converted from the euro at current exchange rates.)
Sales at Luxottica’s retail divisions, which include the LensCrafters and Sunglass Hut International chains, shot up 41.8 percent from last year to $1.88 billion. (LensCrafters has 870 stores in the U.S and Canada; Sunglass Hut counts 1,900 units worldwide). The company’s licensees could easily fill a week of runway shows: Giorgio Armani, Byblos, Chanel, Ungaro, Moschino and Ferragamo. Helming Luxottica, which is listed on the New York and Milan stock exchanges, is founder Leonardo Del Vecchio, a man whose profile is as low as his business insight is high.
A self-made man, Del Vecchio spent time in Milan’s Martinitt orphanage and later earned some pocket money by working for a company specializing in the engraving of medals. In 1960, when the Italian economy was on the upswing, Del Vecchio put that experience to use when he set up shop in Milan, etching glasses for eyewear companies in the Belluno area. When the town of Agordo offered him a strip of land to build a factory, Del Vecchio’s dilemma was whether to leave Milan and his profitable business to relocate to a sparsely populated area. But ultimately, he decided to take the plunge, and in 1961 founded Luxottica s.a.s. Soon after, the company took on the production of complete collections and, in 1988, signed its first license with Giorgio Armani.
Del Vecchio, who divides the majority of his time between Milan and New York, has nonetheless kept his ties to Agordo; he even had a chalet built inside his company’s sprawling headquarters to stay in during visits.
According to ceo Chemello, it’s Luxottica’s flexibility and efficiency that have turned it into a powerhouse. Chemello also stresses the importance of synergy between the company’s core divisions: production, distribution and the financial side. “The winner is who strikes the right and harmonious balance between the three divisions,” said Chemello.
As with Luxottica’s purchase of Sunglass Hut, reaching out to the retail customer was also De Rigo’s goal with the acquisition of General Optic, the leading eyewear chain in Spain with 165 stores, two years ago.
De Rigo also shook things up in 1999 when it formed Eyewear International Distribution, a joint venture with Prada, instead of hewing to a classic licensing agreement in which it would have produced and distributed eyewear for all the Prada brands.
“We knew that Bertelli wanted to do eyewear without a license, and that everyone was courting him, so we offered him a partnership,” said Ennio De Rigo, chairman.
The accord with Prada couldn’t have come at a better time, giving De Rigo a much-needed boost after the company saw sales plummet from $150 million to $50 million between 1996 and 1998. “Our in-house brands, Police and Sting, were suddenly faced with the harsh competition of designer second lines like Emporio Armani and lost a huge market share,” said Maurizio Dessolis, financial manager at De Rigo. De Rigo’s portfolio includes most of the LVMH brands: Marc Jacobs, Fendi, Loewe and Celine. De Rigo, which is listed on the New York Stock Exchange, reported a 2001 sales increase of 10.7 percent to $435.3 million.
Marcolin has also posted heady gains, with sales shooting up from $57,000 in 1996 to an estimated $155 million in 2002. The company, founded in 1961, was listed on the Milan bourse in July 1999 and that same year acquired Creative Optics Inc., a U.S distribution chain, to further penetrate the market, which already accounts for 40 percent of Marcolin’s business.
Marcolin’s latest project is “Pure Titanium,” a new tailor-made prescription line for Dolce & Gabbana, aimed at a super-selective clientele that will debut in mid-March. Retail prices range from $380 to $425.
The three key concepts are lightness — even the screws are made from titanium — comfort and exclusivity. “The study behind these frames is revolutionary because there are 61 combinations between fit, color and shape,” said Marcolin, adding that he expects the line to rake in $2.6 million wholesale in its first year.