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Luxottica fares well despite uncertain global economy
Despite the cooling of the overall global luxury market, the outlook for sunglasses and eyewear, especially in emerging and developing markets, including South America and Asia, looks bright.
Growth opportunities in emerging markets are based on the greater purchasing power of the upper-middle class, the proliferation of luxury stores and the increased availability and rising consumer recognition of premium and luxury brands. The concentration of global wealth in emerging markets has created increased demand for luxury items and accessories, driving consumption in the premium segment.
This is great news for players like Italy-based Luxottica, a global market leader in the design, manufacture and distribution of eyewear. Its designs encompass fashion, luxury, sport and performance eyewear and it owns some of the market’s biggest brands such as Oakley or Ray-Ban.
While the recent economic crisis has hurt makers of designer goods and made many Italian fashion companies, facing internal and external challenges, easy prey for international conglomerates, Luxottica’s market continued to expand and its net sales reached $9.1bn in 2012. The company designs and retails more than 80% of the world’s major eyewear brands and claims that 500 million people around the world wear its products.
What are the reasons behind such good performance and what is Luxottica’s largest competitive advantage? Check out MarketLine Case Study: “Luxottica – rise to power through extreme vertical diversification”