How badly are we being ripped off on eyewear? Former industry execs tell all

[optimensch]

Your argument that the article is bunk seems to rest on the premise of semantics. Replace "monopoly" with the words "insufficient competition" in your post and see if you still agree with what you wrote.

NO. My argument that the article is BUNK rests on the fact that IT IS NOT JOURNALISM. It is a One-sided HIT PIECE with ZERO FACTS presented and most importantly without the other side of the argument. At most it is a frustrated opinion piece, but certainly NOT in any way a researched investigative journalism piece. What THE F does Insufficient Competition mean? What are you talking about? Answer any single question I've posted, and I've posted plenty for you to choose from. Show me ANYTIHNG that looks at like insufficient competition at ANY level of optical retail or wholesale. You read a stupid article like this and eat the pablum? Is that the best you've got?

[optimensch]

Eaton's was a dominant player in canada. Sears was a dominant player in North America, TOYSRUS was a big player in toys, America On Line was a big player in internet access. General Motors was a big player in cars. The ground is ALWAYS shifting. There is NOTHING special about eyewear that makes Essilux invulnerable. The day Jeff Bezos decides he likes eyewear, watch out. A technology will emerge that will change everything overnight, who knows. But this tired old nonsense fairy tale, oft trotted out by the media-loved Warby Parker talking heads about the evil empire controlling every pair of glasses sold on the planet and how they price gouge people with their Chanel Frames is a total joke, and for an optometrist to basically barf out the same talking points is a bit sickening.

[optimensch]

So given that the competition bureaus around the world green lit the merger - I suppose they are all on the take? I mean obviously they looked at the competitive landscape, they analyzed everything and they all came to the conclusion that either a) there is sufficient competition therefore ESSILOR and Lux can merge or b) there is a monopoly but there is a pay off, conspiracy world wide and the evil empire cabal has illegally subdued the eyewear market world wide. So which is it? Why is this not addressed in the article, I mean the 2 know-it-all insiders you admire are asking for investigation, but you see, there was one to greenlight the merger. SO let's see, why did the journalist not mention this or perhaps ask a government agency for clarification? He only points out that Essilux declined to comment. Now you, experienced OD, claim there is insufficient competition. Again, I ask you, where is this manifest? In your local mall? Where is the problem specifically please, I really look forward to your insight.

[optimensch]

Insufficient competition. There are thousands and thousands of independent retailers NOT controlled by luxottica, hundreds and hundreds of suppliers, online glasses, offline glasses and you can buy glasses for basically ANY price and from ANY source your could possibly imagine BOTH AT RETAIL AND WHOLESALE. Yet there are 2 political parties in the USA. Yup. The Paradox of Choice, Barry Schwartz. Let's just compare eyewear with telecom - what a JOKE it is so ridiculous I cannot believe anyone with even a drop of research into the subject would take this seriously. If it takes you more than an hour to conclude otherwise, you are willfully blind and/or have some other agenda.

[Chris Ryser]

- what a JOKE it is so ridiculous ..........................................

- what a JOKE it is so ridiculous I cannot believe anyone with even a drop of research into the subject would take this seriously. If it takes you more than an hour to conclude otherwise, you are willfully blind and/or have some other agenda.

.........................................one large source for research on the subject is right here on optiBOARD, which contains dozens of posts, that talk of lower priced retail sales than at the standard mega markup for at least the last 14 years.

This is not a new subject, but it is now wide open, and published even in daily newspapers. So you can not hide behind silence anymore, specially when the largest optical manufacturer of lenses and optical eyeglass frames is officially jumping into the discount retail market and in direct competition to the established retailers.

[lensmanmd]

I think a big piece to this confusion is that many in the industry do not know, or care, that many labs and suppliers are under the Essilor blanket. What may seem to be an independent, is not. Does that matter? To some, it does, but the main point is this, if a conglomerate owns, or has a share of over 50% of worldwide supply chain, they can basically fix prices, and consumer opinions. Plus, they can cripple the independents by effectively cornering the raw materials, real estate and supply logistics if they want.

Let's look at two favorite darlings of our industry. OptiSource and Dynamic Labs. On the surface, both look like independents, both sell similar items for less than Hilco, Grobet or Western, but reality is, Dynamic Labs is independent, where OptiSource is an ESS subsidiary. National Optronics/DAC and SatisLoh are both under the Essilor umbrella. Your local wholesale lab is most likely under the Essilor umbrella, as well.

Good thing is, Essilor allows many of these entities to self manage. Bad thing is, taking LensCrafters into consideration, Corporate will eventually pressure the CEOs of these "entities". Pricing goes up, service goes down. This is what conglomerates do to appease their shareholders.

In short, I do agree with you, but also want you to know that the independent that you deal with may not be independent at all. Yes, we have choices, and many of us choose to support independents. We will also end up supporting the conglomerates, as well. My lab is mostly SatisLoh and NatOpt, with a few MEI, Coburn and Luneau thrown in. Coating is Ultra and Quantum. Our LMS is an ESS subsidiary. Many LMS systems are. So yes, I lament EssiLux, but I also support them in many ways. My biggest concern is with frames and lenses, our basic commodities. Consumers are driven by marketing, and ESS is the King of marketing. Consumers equate this marketing with quality. Many of us in the industry know better, but not your average VSP client.

The biggest thorn is that conglomerates throw money around at mass advertising. Think about Varilux and Transition ads on TV. Oakley at sports events. Makes me wonder why Essilor has not yet bought Red Bull. Red Bull and Oakley seem to go hand in hand at these events, yes? Smith, MJ, WileyX, Costa, all make better sports products, IMO, and at better price points to the ECP and consumer, yet, consumers are driven to Oakley. Power of advertising, and the bigger the budget, the more consumer-centric adverting. Hence the power of the EssiLux empire.

So again, yes, we professionals have options, and it is up to us to make the best decisions to support and sustain our businesses. The fast growing Asian market for lenses, hopefully, will change the landscape. Problem here is the supply chain logistics and minimum qty orders. Many small labs rely on just in time ordering for commodities. Asian suppliers typically require bulk orders that tie up too much capital up front. Then there are customs and tariffs to consider. It is so much easier to order from existing European and American suppliers, as they have distribution networks here in the US.

My greatest pipe dream is that the independent optical scene will blossom like the craft brew scene. It may not drive prices down, but quality, choices and availability will rise. Better quality products at the same pricing as BO wholesale. Wouldn't that be nice?

These journalists are out to make a few bucks with an easy "shock" article. Quit with the Consumer Reports and tabloid laziness, instead, provide real journalistic integrity. If they took time and really researched our industry, perhaps they will find that VSP, EyeMed, Davis, UnitedHealth and other vision insurance providers are the ones that drive consumer prices up, just like they do with healthcare. And while at it, they need to do a deep dive into the frame and lens wholesale industry, not just EssiLux, but other players as well. They give Pharma a free ride because of the amount of claimed R&D. What about the Lens industry? There is quite a bit of R&D here, too. As for frames, do we really need Dickies, Harley Davidson, Skechers, Champion, Pink by VS? Yet the market is full of these unnecessary brands that are over priced due to the licensing fees. Consumers aren't requesting these brands, manufactures are marketing these brands. Why?

[Chris Ryser]

and other vision insurance providers are the ones that drive consumer prices up......

lensmanmd, ....................................What a beautiful and well well written post, that just about says it all.

These journalists are out to make a few bucks with an easy "shock" article. Quit with the Consumer Reports and tabloid laziness, instead, provide real journalistic integrity. If they took time and really researched our industry, perhaps they will find that VSP, EyeMed, Davis, UnitedHealth and other vision insurance providers are the ones that drive consumer prices up, just like they do with healthcare. And while at it, they need to do a deep dive into the frame and lens wholesale industry, not just EssiLux, but other players as well. They give Pharma a free ride because of the amount of claimed R&D. What about the Lens industry? There is quite a bit of R&D here, too. As for frames, do we really need Dickies, Harley Davidson, Skechers, Champion, Pink by VS? Yet the market is full of these unnecessary brands that are over priced due to the licensing fees. Consumers aren't requesting these brands, manufactures are marketing these brands. Why?

..................these brands let the importer the freedom to purchase a model from anywhere he desires and have his own brand added to the frames he orders from some 25 different suppliers, to make it look as that they have been made in the same kitchen.

[optio]

I'll admit I tried reading a few of your stream of consciousness posts, but it was clear it was going to take an effort I wasn't willing to make, so I stopped.

What I will say though, gets back to reading comprehension. The article is about a claimed Essilux "monopoly". It is not about you, (I presume) a private practice optometrist. The word "optometry", nor any of its derivatives appear anywhere in the article. A search of the article for the root word "optom" yields zero hits.

This is (to use your words) a hit piece on Luxottica. It's not an expose on rip off private practice optometrists who sell eyewear. Now, you may also sell eyewear in the "same" competitive environment as Luxottica, but the article isn't about you or optometrists like you (as an aside, something makes me wonder why you get so defensive about a hit piece on Luxottica ripping people off). It's about the fact that when the journalist goes into the Eaton's Center, he sees Sunglass Hut near the entrance, an LC halfway down the mall, and a Sears Optical at the end. They are all controlled by Luxottica/Essilux. He's also told by an industry insider of absurd markups for the stuff in those stores. So that's what he's trying to report.

Do you get an income statement at least yearly from your accountant? Have you examined your COGS?

This illustrates my point exactly. Why are you asking me about MY income statement? I'm not Luxottica nor do I represent them in any way. I presume you don't either. So who cares what my (or your) COGS is? What does that have to do with anything the journalist has said? It all gets back to reading comprehension. This article is about Luxottica, not the private practices of optometrists who sell eyewear.

[drk]

How I see it:

1. Journalism is dead
2. Essilor is probably approaching monopoly status in the lab world
3. Luxottica is hardly a monopoly.
4. Luxottica retail is a snooze fest. Who cares?
5. EyeMed, like Lux frames, is huge, but has competition.
6. Oh, and the concept of frame prices being "too high" because of "Luxottica's Monopoly" is pure, unadulterated garbage.


So what do we have? Mainly, Luxottica is fine. Essilor is bad. Who knows if Essilor is hiding behind Luxottica, when it comes to this monopoly stuff? There is certainly a case to be made about the Essilor division, but can they tease out the two? I don't know.

[optimensch]

I'll admit I tried reading a few of your stream of consciousness posts, but it was clear it was going to take an effort I wasn't willing to make, so I stopped.

What I will say though, gets back to reading comprehension. The article is about a claimed Essilux "monopoly". It is not about you, (I presume) a private practice optometrist. The word "optometry", nor any of its derivatives appear anywhere in the article. A search of the article for the root word "optom" yields zero hits.

This is (to use your words) a hit piece on Luxottica. It's not an expose on rip off private practice optometrists who sell eyewear. Now, you may also sell eyewear in the "same" competitive environment as Luxottica, but the article isn't about you or optometrists like you (as an aside, something makes me wonder why you get so defensive about a hit piece on Luxottica ripping people off). It's about the fact that when the journalist goes into the Eaton's Center, he sees Sunglass Hut near the entrance, an LC halfway down the mall, and a Sears Optical at the end. They are all controlled by Luxottica/Essilux. He's also told by an industry insider of absurd markups for the stuff in those stores. So that's what he's trying to report.


This illustrates my point exactly. Why are you asking me about MY income statement? I'm not Luxottica nor do I represent them in any way. I presume you don't either. So who cares what my (or your) COGS is? What does that have to do with anything the journalist has said? It all gets back to reading comprehension. This article is about Luxottica, not the private practices of optometrists who sell eyewear.

So. Have you reread the article you posted. It is about "ripoffs" in our industry, including, apparently, Warby Parker. He says frames are a few dollars and lenses are a couple of bucks. The fact that the fellow interviewed was a Lenscrafters man and later a supplier to lux is an aside. The article is about the Industry. Please read it again and see and see for yourself, this is OBVIOUS. People are paying $800, so it is told, for glasses worth 15$ or so, at most. This is NOT only a slap at Lux. When I suggest you read an income statement I meant, and wrote, to ALSO read Luxottica's. And Newlook's. Why? Because they are both optical retailers and if the $15 becomes $800 story is the least bit newsworthy or true, this would be reflected in either company's COGS. It is a total and complete misrepresentation. I do not want to defend Essilux, I could not possibly care less about them. I care about our industry, and about keeping things truthful. A news story shows at least some effort to vet what is being said by the person being interviewed. It is a garbage article full of misrepresentations. That is my only point. That you choose to post it is NOT at all a problem, as it is good to see what is being said. I am merely pointing out that it is totally flawed, offers absolutely nothing but bs propaganda by a seemingly frustrated former "insider". The article is about the Eyewear industry via an interview of someone who was a Lenscrafters man and then a Supplier to Luxottica - that is his background. He is swiping at all of us. READ. ARTICLE. MAN> before you attack my reading comprehension, examine yours. Please. Thank you.

[optimensch]

how i see it:

1. Journalism is dead
2. Essilor is probably approaching monopoly status in the lab world
3. Luxottica is hardly a monopoly.
4. Luxottica retail is a snooze fest. Who cares?
5. Eyemed, like lux frames, is huge, but has competition.
6. Oh, and the concept of frame prices being "too high" because of "luxottica's monopoly" is pure, unadulterated garbage.


So what do we have? Mainly, luxottica is fine. Essilor is bad. Who knows if essilor is hiding behind luxottica, when it comes to this monopoly stuff? There is certainly a case to be made about the essilor division, but can they tease out the two? I don't know.

1. Agree
2. Agree because you said so and generally i will take drk's word for anything
3. Agree
4. Agree
5. Agree
6. Agree
7. Agree in advance to your next comment

[optimensch]

https://www.marketwatch.com/investing/stock/esloy/financials

I mean - I am not an accountant and claim only slightly more than ZERO expertise in stock analysis. I see a COGS which is somewhat less than 97%. Can someone more knowledgeable on the subject than me opine? Where are !5$ glasses getting sold for $800 in this statement, and if the statement says otherwise, please feel free to opine on the news article aforementioned. I suggest you examine NewLook (bci.to , you can see their numbers if you check on yahoo finance canada for example) and Luxottica. My point is that if I, a simple optometrist, can IMMEDIATELY see the flaws and lies in this "news" article, why can't an investigative reporter. Again, if we (or Essilor or Luxottica) can, through occult, alchemy and malfeasance, convert $15 into $800 on a sustained basis, thereby threatening the eyesight of america (hence the epipen alarm in the story) via monopolistic tendencies in people of an optical persuasion, why do those pesky numbers is financial statements, prepared by bean counter nerds, not reflect this?

[drk]

7. You're awesome.


I'd really like to see a guy like LabInsight or others on the lab end validate or invalidate my take on their near-monopoly status.

[optio]

So. Have you reread the article you posted. It is about "ripoffs" in our industry, including, apparently, Warby Parker.

It's about Luxottica. Can you show me where he mentions Warby? I see it once, when he says this:

“You can get amazingly good frames, with a Warby Parker level of quality, for $4 to $8,” Butler said. “For $15, you can get designer-quality frames, like what you’d get from Prada.”

So his reference to Warby is to imply that Lux is a ripoff.

After all, if you're going to say someone is a rip off, you need to define an alternative. And so he does. He makes his point.

[Chris Ryser]

How I see it:

1. Journalism is dead
1b. However it still is being published and read by the masses.

2. Essilor is probably approaching monopoly status in the lab world
2b. Essilux is already in a monopoly status in the world and is working hard
to make it also in frames + retail within the next few years.

3. Luxottica is hardly a monopoly.
3b. Luxottica is now part of Essilux which is working hard to become THE
monopoly of the optical retail world.

4. Luxottica retail is a snooze fest. Who cares?
4b. It was only the largest frame manufacturer, world wide, before the mega merger
and still is.

5. EyeMed, like Lux frames, is huge, but has competition.
5b. However it is already part of the Essilux family

6. Oh, and the concept of frame prices being "too high" because of "Luxottica's Monopoly" is pure, unadulterated garbage.
6b. It looks more that the Essilux monopoly "in waiting" tends more towards selling frames in retail for a lot less than today's standard.

..................maybe it should look like this