News

[optirep]

Tiffany, Luxottica Make Eyewear Pact

By Hema Oza
TheStreet.com Staff Reporter
12/5/2006 6:01 PM EST
Click here for more stories by Hema Oza



Tiffany (TIF - commentary - Cramer's Take) announced its entrance into the luxury-eyewear business Tuesday, signing a 10-year licensing deal with Milan's Luxottica Group (LUX - commentary - Cramer's Take).

Under the agreement, Luxottica, which also licenses eyewear to the likes of Burberry, Chanel, Prada and Versace, will design, manufacture and distribute prescription glasses and sunglasses using the Tiffany brand name.
After designing and producing jewelry and accessories for nearly 170 years, entering into high-end eyewear seemed like "a natural addition" for Tiffany, said Michael Kowalski, the company's chairman and chief executive, in a statement.
"Tiffany's success has always been tied to offering a wide range of extraordinary product designs, in jewelry, timepieces, tableware and accessories," Kowalski went on to say. "We are pleased to establish this relationship with Luxottica, which we believe will generate exciting designs for our customers."
Further, Tiffany's entrance into this market "demonstrates that eyewear has evolved into a high-style, luxury accessory," said Andrea Guerra, Luxottica's CEO. The companies plan to launch the first collection of glasses in Tiffany stores and exclusive eyewear retailers in early 2008. Luxottica expects the line to have at least 50 million euros (about $67 million) in annual revenue.

[Grubendol]

I have to admit to being intrigued.

[Dave Nelson]

Hmmmm. stained glass lenses?

[Chris Ryser]

Further, Tiffany's entrance into this market "demonstrates that eyewear has evolved into a high-style, luxury accessory," said Andrea Guerra, Luxottica's CEO.
Luxottica expects the line to have at least 50 million euros (about $67 million) in annual revenue.

xe.com Universal Currency Converter ® Results Live mid-market rates as of 2006.12.06 16:57:45 UTC.

50,000,000.00 EUR =66,515,002.37 USD

United States Dollars 1 EUR = 1.33030 USD 1 USD = 0.751710 EUR

[Chris Ryser]

LUXOTTICA TO MAKE KEY ACQUISITION OF 100 OPTICAL STORES IN THE UNITED STATES


Milan - Italy, November 2, 2006 - Luxottica Group S.p.A. (NYSE: LUX; MTA: LUX) today announced an expansion of its retail operations in North America through the signing of a definitive agreement to acquire D.O.C Optics, an optical retail business with approximately 100 stores located primarily in the Midwest United States.
Leonardo Del Vecchio, chairman of Luxottica Group, commented: “Our North American retail business is today on track to deliver strong results for 2006, yet we believe that there continue to be opportunities for significant additional growth in that market. The D.O.C Optics transaction represents another key step in our long-stated strategy to maximize growth opportunities for our optical retail brands, including LensCrafters and Pearle Vision.”
D.O.C Optics stores operate in Michigan, Ohio, Missouri, Wisconsin, Florida and Illinois with a majority of its retail locations in and around the Detroit metropolitan area. D.O.C Optics is projected to post system revenues for fiscal year 2006 in excess of US$100 million.
Luxottica Group has long admired the D.O.C Optics business, founded by Dr. Donald Golden in 1946. With the Golden family, the Group shares a commitment to quality, innovation and customer service. D.O.C Optics is deeply rooted in the community, with a brand image, customer profile and existing focus on fashion already aligned with those of the Group’s retail operations in the region. This makes the combination of D.O.C Optics and Luxottica Group's existing retail operations an excellent fit for expanding the Group's presence in the Midwest.
In connection with this asset transaction, Luxottica Group expects the total purchase price, net of expected tax benefits, to approximate US$90 million. The closing of the transaction is expected to occur during the first quarter of 2007, subject to customary closing conditions and U.S. regulatory approvals.
The Group will discuss this transaction on its regularly-scheduled quarterly investor conference call scheduled for Monday, November 6 and available via webcast through the investor relations section of Luxottica Group’s website at www.luxottica.com.