The Tom Ford are good examples in the fashion

The often quoted “Luxottica owns
80% of the market” is not quite right. The 80% is brand recognition, if
anything. If you’ve ever been to an optical show, Luxottica’s stand is one in a
sea of stands – there are thousands of non-Luxottica eyewear brands. Sure, many
of those brands are not as recognisable as Ray Ban, but there are plenty of
non-Luxottica brands that are – Nike and Adidas are good examples in the sports
eyewear category; Police, Dior and Tom Ford are good examples in the fashion
eyewear category. There are literally hundreds of major brands and thousands of
lesser brands in the same boat. Luxottica have 20% of the US Eyewear market
share and they own around half of the US’s  national eye care centers.

The argument is that Luxottica’s frames
have huge mark-ups and are overpriced. Even if they were, all almost eyewear
manufacturers have similar mark-ups – why would Luxottica underprice everyone?

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

There are plenty of cheap frames with no
branding that offer the same quality and eye protection as Luxottica – people
have so many alternatives it’s laughable that Luxottica could be considered a

Your question, why has no one come in
and undercut them? Off the back of the negative Luxottica PR, several companies
have tried this, positioning themselves as ‘cutting out the middleman’ – Warby
Parker, Bailey Nelson, Zenni Optical et al. Their frames are mostly cheaper and
only carry their own brand. However, one of Luxottica’s major costs is
marketing – they focus on branded eyewear and it takes money to keep brands
cool. People often don’t see this as ‘value’, but if they didn’t do this, no
one would want Ray Bans. Warby Parker’s mark-up will not be far off
Luxottica’s, altered only by economies of scale and reduced marketing costs.

However, companies can’t reproduce
exactly what Luxottica have. Other companies don’t have Ray Ban or Chanel as
brands (owning a brand does not make you a monopoly, othewise Apple would be a
monopoly for Apple computers).

Luxottica’s competitors (Safilo, Kering,
De Rigo, Marchon, Marcolin) control a lot of the other major brands (Dior,
Gucci, Police, Nike, Calvin Klein, Tom Ford and more) and mark-up the same as
Luxottica – they all exist to make money for their shareholders. Pricing a Dior
frame way less than, say, a Chanel, is going to cheapen the Dior brand.

In the US, Luxottica does own several
major eyewear stores, which do make up a significant portion of the market.
Note I say in the US. Despite what many of its citizens might
think, there is a whole world beyond its borders – Luxottica is not even close
to dominate the eyewear retail industry anywhere else in the world. Even within
the USA, there is still plenty of choice of where to buy your glasses – even high-end

Therefore, yes – you can get frames of
the same quality as a Ray Ban for less than a Ray Ban. This does not make Ray
Ban’s overpriced – as with every brand name, you pay a premium for the brand.
This would be the case if it was owned by any manufacturer.

I’m certainly not saying Luxottica are a
morally perfect company, but they’re no worse than anyone else. Nor do they
need people like me to ‘stand up for them’, but it does create a lot of
misunderstanding about the eyewear industry in general. People get a lot of
satisfaction from feeling like they know “the truth” about things,
making the whole ‘Luxottica are bad’ thing spread very quickly with little
thought to compare it to some of the other major eyewear manufacturers.

I have no link with Luxottica, other
than having sold some of their products.