Essilor / Luxottica .....................final merger

[Chris Ryser]

It has been done......................................

Essilor and Luxottica Marriage Approved

By Daniel Feldman, October 1, 20

LUXEMBOURG and CHARENTON-LE-PONT, France—Twenty months after announcing the biggest deal in optical industry history,Delfin S.a.r.l, the majority shareholder of Luxottica Group S.p.A. and Essilor International have completed the combination of Essilor and Luxottica. The Combined holding company, EssilorLuxottica,has pro forma combined revenues in excess of € 16 billion, nearly 150,000employees and an unmatched global footprint, making it the world’s largest designer, manufacturer and distributor of ophthalmic lenses, prescription frames and sunglasses. EssilorLuxottica unveiled its new visual identity and corporate website today.

Beginning October 2, 2018, EssilorLuxottica shares will be traded on Euronext Paris, under the ticker symbol EL with the same ISIN codeFR0000121667, according to an announcement posted on the website today. They Will be part of the CAC 40 and Euro Stoxx 50 indices.
Leonardo Del Vecchio, executive chairman of EssilorLuxottica,said, “We are at the beginning of a new chapter in our history in which we strongly believe, bringing together frames and lenses under the same roof and completing our vertically integrated business model. We will enhance the excellence of Luxottica and Essilor to improve the service level and offers consumers around the world ever better products that leverage on our most beloved brands with cutting-edge lens technologies. We will expand our offering foster the development of our customers’ business and the entire industry.”

LUXEMBOURG and CHARENTON-LE-PONT, France—Twenty months after announcing the biggest deal in optical industry history,Delfin S.a.r.l, the majority shareholder of Luxottica Group S.p.A. and Essilor International have completed the combination of Essilor and Luxottica. The Combined holding company, EssilorLuxottica,has pro forma combined revenues in excess of € 16 billion, nearly 150,000employees and an unmatched global footprint, making it the world’s largest designer, manufacturer and distributor of ophthalmic lenses, prescription frames and sunglasses. EssilorLuxottica unveiled its new visual identity and corporate website today.

Beginning October 2, 2018, EssilorLuxottica shares will be traded on Euronext Paris, under the ticker symbol EL with the same ISIN codeFR0000121667, according to an announcement posted on the website today. They Will be part of the CAC 40 and Euro Stoxx 50 indices.
Leonardo Del Vecchio, executive chairman of EssilorLuxottica,said, “We are at the beginning of a new chapter in our history in which we strongly believe, bringing together frames and lenses under the same roof and completing our vertically integrated business model. We will enhance the excellence of Luxottica and Essilor to improve the service level and offers consumers around the world ever better products that leverage on our most beloved brands with cutting-edge lens technologies. We will expand our offering foster the development of our customers’ business and the entire industry.”

LUXEMBOURG and CHARENTON-LE-PONT, France—Twenty months after announcing the biggest deal in optical industry history,Delfin S.a.r.l, the majority shareholder of Luxottica Group S.p.A. and Essilor International have completed the combination of Essilor and Luxottica. The Combined holding company, EssilorLuxottica,has pro forma combined revenues in excess of € 16 billion, nearly 150,000employees and an unmatched global footprint, making it the world’s largest designer, manufacturer and distributor of ophthalmic lenses, prescription frames and sunglasses. EssilorLuxottica unveiled its new visual identity and corporate website today.


Beginning October 2, 2018, EssilorLuxottica shares will be traded on Euronext Paris, under the ticker symbol EL with the same ISIN codeFR0000121667, according to an announcement posted on the website today. They Will be part of the CAC 40 and Euro Stoxx 50 indices.


Leonardo Del Vecchio, executive chairman of EssilorLuxottica,said, “We are at the beginning of a new chapter in our history in which we strongly believe, bringing together frames and lenses under the same roof and completing our vertically integrated business model. We will enhance the excellence of Luxottica and Essilor to improve the service level and offers consumers around the world ever better products that leverage on our most beloved brands with cutting-edge lens technologies. We will expand our offering foster the development of our customers’ business and the entire industry.”


In addition to their new roles at EssilorLuxottica, Del Vecchio And Sagnieres keep their respective positions as executive chairman of Luxottica and chief executive officer of Essilor International SAS,EssilorLuxottica said. Essilor International SAS and Luxottica maintain their respective boards of directors.


Following the contribution by Delfin, the majority shareholder of Luxottica, of its 62.42 percent stake in Luxottica to Essilor on Oct.1,2018, Essilor became the parent company of Luxottica and was renamed Essilor Luxottica.


As consideration for the contribution by Delfin of its stake in Luxottica to Essilor, Essilor issued 139,703,301 new ordinary shares through a capital increase without preferential subscription rights pursuant to resolution approved by Essilor shareholders in May 2017.


Following the closing, EssilorLuxottica main shareholders are Delfin (38.93 percent of capital with voting rights capped at 31 percent) and Essilor Luxottica employees (4.9 percent). The remaining 56.8 percent of the shares are being publicly held. EssilorLuxottica said it will soon be launching a Mandatory Exchange Offer for the remaining issued and outstanding Luxottica Shares.
Essilor International and Luxottica will maintain their respective boards of directors. The board of directors of EssilorLuxottica is composed of 16 members: Leonel Ascencao Pereira, Romolo Bardin, Leonardo Del Vecchio, Juliette Favre, Giovanni Giallombardo, Bernard Hours, Annette Messemer, Francesco Milleri, Gianni Mion, Lucia Morselli, Olivier Pécoux,Sabrina Pucci 3, Hubert Sagnieres, Cristina Scocchia, Jeanette Wong and DelphineZablocki.


An integration committee, led by Leonardo Del Vecchio and Hubert Sagnieres, will ensure a smooth and successful integration of Essilor and Luxottica. The new EssilorLuxottica board of directors met today and decided on the following:
• The appointment of Hilary Halper, Essilor chief financial officer, and Stefano Grassi, Luxottica chief financial officer, as co-chief financial officers of the new combined entity.
• The Nomination and Compensation Committee will be mandated before the end of January 2019 to lead the search process for a chief executive officer.
• The approval of the new rules of procedure of the EssilorLuxottica board of directors to be published on the website of EssilorLuxottica.
• The approval of financial authorizations necessary for the combined company,Essilor International SAS and Luxottica to operate their respective businesses.


During the first part of 2019, EssilorLuxottica will present its first combined annual results and is expecting to hold a Capital Markets Day For investors and analysts.


Source:

https://theopticalvisionsite.com/ess...ision+Site+%29

[Chris Ryser]

“We are at the beginning of a new chapter in our history in which we strongly believe, bringing together frames and lenses under the same roof and completing our vertically integrated business model.

....................and here is the address of their new website:

https://www.essilor-luxottica.com

[Lab Insight]

....................and here is the address of their new website:

https://www.essilor-luxottica.com

Get your popcorn ready for the release of Braveheart 2. It is unfortunately inevitable that even more heads are gonna roll in this sequel.

Del Vecchio says "we have just completed our vertically integrated business model". Many years in the making but now a reality.

To any indy ECP out there that doesn't understand the term 'vertical integration', you are about to get schooled.

[Chris Ryser]

To any indy ECP out there that doesn't understand the term 'vertical integration', you are about to get schooled.

Vertical integration and expansion is desired because it secures the supplies needed by the firm to produce its product and the market needed to sell the product. Vertical integration and expansion can become undesirable when its actions become anti-competitive and impede free competition in an open marketplace. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a "vertical monopoly".

See all of it:

https://en.wikipedia.org/wiki/Vertical_integration

[Lab Insight]

Vertical integration and expansion is desired because it secures the supplies needed by the firm to produce its product and the market needed to sell the product. Vertical integration and expansion can become undesirable when its actions become anti-competitive and impede free competition in an open marketplace. Vertical integration is one method of avoiding the hold-up problem. A monopoly produced through vertical integration is called a "vertical monopoly".

See all of it:

https://en.wikipedia.org/wiki/Vertical_integration

Vertical integration + competitor = no ecp

Pretty simple math.

[Chris Ryser]

Vertical integration + competitor
= no ecp


Pretty simple math.

...................................well stated Lab Insight


Having followed this development since the early 1960's when big E set foot in Canada first, my predictions posted on Optiboard for the last 11 years, have become reality and will now progress at a much faster pace.

One should not forget that a manufacturer that sells retail online is making a higher gross profit than by selling through the wholesale market to professional retailers.

[Lab Insight]

...................................well stated Lab Insight


Having followed this development since the early 1960's when big E set foot in Canada first, my predictions posted on Optiboard for the last 11 years, have become reality and will now progress at a much faster pace.

One should not forget that a manufacturer that sells retail online is making a higher gross profit than by selling through the wholesale market to professional retailers.

Crickets.......

Seems nobody is concerned about their future Chris.

[mervinek]

Our office does not do business with Luxottica or Essilor. However, until recently they participated with Eyemed. Perhaps they did not realize the connection? Anyway, we dropped Eyemed and seemed to have done it at the right time now that we hear all the problems they are having. So while the merger in not good, and gives me nightmares, what more can we do?

[Oscar]

Crickets.......

Seems nobody is concerned about their future Chris.

what can be done? the merger has happened. we either adapt or die.

[mervinek]

what can be done? the merger has happened. we either adapt or die.

Or...retire early

[Don Gilman]

what can be done? the merger has happened. we either adapt or die.

With all the tentacles under different names it's tough to know who you are really dealing with. Find the independents and if not sure call them and ask if they are.

[Chris Ryser]

what can be done? the merger has happened. we either adapt or die.

A very simple solution, as I have posted on several occasion on other threads, is: .................................

Sell at the same price levels as they do without any service..............and then charge for any service you provide separately, from choosing a frame, to the lenses and the final adjustment ect., according to your experience and knowledge.

At that plateau you will be on a much higher level than a pair of glasses is when fresh out of a factory and made without any personal contact than following the measurements.

Very simple and straightforward.

You could even service glasses purchased online or at some discount chain.

Make up a service price list and correct it as you go along the new unknown path

[Quig]

A very simple solution, as I have posted on several occasion on other threads, is: .................................

Sell at the same price levels as they do without any service..............and then charge for any service you provide separately, from choosing a frame, to the lenses and the final adjustment ect., according to your experience and knowledge.

At that plateau you will be on a much higher level than a pair of glasses is when fresh out of a factory and made without any personal contact than following the measurements.

Very simple and straightforward.

You could even service glasses purchased online or at some discount chain.

Make up a service price list and correct it as you go along the new unknown path

You're suggesting selling at the same price as the Essi-Lux competition, and then charging for help picking out a frame, and then a charge for lens selection and then a charge for adjustment? Am I understanding this correctly?

[Chris Ryser]

You're suggesting selling at the same price as the Essi-Lux competition, and then charging for help picking out a frame, and then a charge for lens selection and then a charge for adjustment? Am I understanding this correctly?

You understand this proposal correctly.........................

However it is an idea to charge my cost at the point of sale and then add the charges for my work, time and effort spent
with the client to compensate for them.

Opticians have used a good multiplier of whatever, for the last few hundred years because in the old days of glass lenses, when there was the manual cutting and chipping of glass lenses, plus the grinding on a hand stone, and the lens which could break at any time, had to be replaced at no extra cost to the customer.

That habit of charging a higher gross profit has been continued into today's age, not counting the modernisation of techniques, materials and machineries into the finished selling prices.

However you also include also the advice time of choosing frames and everything else that go with it, the time to perfectly measure the positioning of the lenses, the discussion of the type of lenses and their materials, colors and coatings, as well as quality and warranties your patients might want.

Your patients will realize that they are paying for a really well organized craftsmanship, which is the basic need when purchasing a pair of glasses that will fit perfectly on their face with lenses that have been made for top class vision.

[mervinek]

I'm not so sure... patients already complain that they are being nickeled and dimed. (They can get glasses cheaper at Visionworks!) God forbid an AR lens cost more than one without AR! While I don't compete with Visionworks because we carry higher end higher quality eyewear (sold by a great optician), to add on extra services can really be a turn off to patients. Don't get me wrong, some services should have a charge.

[Don Gilman]

With all the tentacles under different names it's tough to know who you are really dealing with. Find the independents and if not sure call them and ask if they are.

My post was referring to where to buy lenses, supplies, equipment, consumables etc used daily in you business, not referring to on line business. Maybe we need a list of independent suppliers and the products they sell posted on Optiboard?

[Quig]

You understand this proposal correctly.........................

However it is an idea to charge my cost at the point of sale and then add the charges for my work, time and effort spent
with the client to compensate for them.

Opticians have used a good multiplier of whatever, for the last few hundred years because in the old days of glass lenses, when there was the manual cutting and chipping of glass lenses, plus the grinding on a hand stone, and the lens which could break at any time, had to be replaced at no extra cost to the customer.

That habit of charging a higher gross profit has been continued into today's age, not counting the modernisation of techniques, materials and machineries into the finished selling prices.

However you also include also the advice time of choosing frames and everything else that go with it, the time to perfectly measure the positioning of the lenses, the discussion of the type of lenses and their materials, colors and coatings, as well as quality and warranties your patients might want.

Your patients will realize that they are paying for a really well organized craftsmanship, which is the basic need when purchasing a pair of glasses that will fit perfectly on their face with lenses that have been made for top class vision.

Interesting perspective. Looks like I'm completely 180 degrees different in my approach. Ours is an industry where there is plenty of potential for profit without the 'upselling' of my time/knowledge/experience/attention to detail. My customers get that for 'free' and I make a very decent living.

I sure as heck hope ALL of my competition is of the same mindset as you though.

[Chris Ryser]

Interesting perspective. Looks like I'm completely 180 degrees different in my approach. Ours is an industry where there is plenty of potential for profit without the 'upselling' of my time/knowledge/experience/attention to detail. My customers get that for 'free' and I make a very decent living.

.......................the above is the status quo for opticians in the civilized world, for the last few hundred years.

......................because you have to sell a product that needs the producing of the raw or finished *whatever* lenses into the sold frame, where you have some extra cost through manual labour and breakage, which entitles you to charge a higher markup on the selling price, than is standard for selling finished products.

................... in many Countries, or States/Provinces the optician owning or working in, or for an optical retailer should be well trained and licensed professionals, that are making a decent salary.

My customers get that for 'free' and I make a very decent living.

There is nothing for free in this world of commerce, you can only get any goods and supplies or services for either working or paying for it.

The online sales of just about anything is forcing some large corporations to close hundreds of stores this year, as posted on Optiboard.

The world's largest newly formed optical corporation is now also by far the largest optical online retailer with the many different ones they own, and they are promoting top quality products which they produce.

[Chris Ryser]

You're suggesting selling at the same price as the Essi-Lux competition, and then charging for help picking out a frame, and then a charge for lens selection and then a charge for adjustment? Am I understanding this correctly?

Yes you understand correctly...............................

Online opticals sell their products as they come out their labs, not fitted and adjusted.

[Oscar]

Yes you understand correctly...............................

Online opticals sell their products as they come out their labs, not fitted and adjusted.

Sounds just like 80% of the dispensaries out there. cough cough OD's who delegate

[Golfnorth]

A very simple solution, as I have posted on several occasion on other threads, is: .................................

Sell at the same price levels as they do without any service..............and then charge for any service you provide separately, from choosing a frame, to the lenses and the final adjustment ect., according to your experience and knowledge.

At that plateau you will be on a much higher level than a pair of glasses is when fresh out of a factory and made without any personal contact than following the measurements.

Very simple and straightforward.

You could even service glasses purchased online or at some discount chain.

Make up a service price list and correct it as you go along the new unknown path

Chris;

You will not be surprised to hear that I do not agree with your above solution or think that it's even workable.
So we are going to add on AR coatings etc to the base price then add our consultation services for;
1) choosing a frame
2) choosing the appropriate lenses
3) adjustment of the finished product

So there will be customers that will say that they chose the frame so they should be exempt from that charge.
Then they'll say to drop the charge for adjustment as they'll take the glasses to the competition to get it adjusted for free.
There will be way too much debate in my opinion and because of this ECP's who adopt this strategy will lose volume as a result.

Just me 2 cents.

Regards,
Golfnorth

[lensmanmd]

If B&Ms try to survive with price wars, good luck. Ask any failed retailer that tried that approach when WalMart opened up shop next doors. Also, ask how Target competes, many just across the street from WalMart. They are not cheaper. They provide higher quality brands, better service and a better shopping environment. .
Nickle and diming is not the answer. Golfnut said it well "ECP's who adopt this strategy will lose volume as a result"
Bargain shoppers will shop guided by price, not quality. They do not necessarily care about quality of service, or even knowledge. They have come to view eyewear as a commodity, not a professionally serviced device. We all can thank LensCrafters under the misguided retail direction that Luxottica mismanaged. You can thank Coastal, Zenni, WP and others, as well.
ECPs need to look at their strategy and the market where they do business. What does your business model look like? What do you want it to look like? Who are your clients, and what are their needs? Then tailor your model aligned to that. That is how one survives (and flourishes) in the world of Amazon and EssiLux.
Service is not free, but consider it a part of your advertising budget. Will people take advantage? Of course they will. That is a part of doing business.
Charging for every little service will only drive prospective clients away. No clients, no business.

Chris, I applaud your thinking, but the retail world has changed drastically. Your model is destined for failure.

[Chris Ryser]

You will not be surprised to hear that I do not agree with your above solution or think that it's even workable.

There will be way too much debate in my opinion and because of this ECP's who adopt this strategy will lose volume as a result.

Just me 2 cents.

Golfnorth................Nobody has to agree with me, I am not getting upset, because of it.

The newly formed and approved Essilor/Luxottica Corporation is now by far the largest online retailer in the world, and by now they now own over 10,000 optical retail stores worldwide.

They are not only the largest frame and lens manufacturer, they work hard at changing the optical retail world.

I have spent plenty time to look at their behaviour over the years shows the reality of wanting to dominate the optical retail eyeglass market at all cost, and be the winner at the end.

Make some proposal that will work and prevent or circumvent any possible domination of a world wide optical retail market by a single company.

[lensmanmd]

Golfnorth................Nobody has to agree with me, I am not getting upset, because of it.
Make some proposal that will work and prevent or circumvent any possible domination of a world wide optical retail market by a single company.

Governments don't give a rats' ***, obviously. Monopoly, What's that? The idea is not to fight it, but figure out how to survive and profit from it. First obvious response is for the ECPs not to do business with them. Not purchasing Lux brands is easy. Not doing business with Essilor labs is easy. SaitsLoh and DAC? not so easy.

ECPs need to look at their strategy and the market where they do business. What does your business model look like? What do you want it to look like? Who are your clients, and what are their needs? Then tailor your model aligned to that. That is how one survives (and flourishes) in the world of Amazon and EssiLux.
Service is not free, but consider it a part of your advertising budget. Will people take advantage? Of course they will. That is a part of doing business.
Charging for every little service will only drive prospective clients away. No clients, no business.

The entire debacle in the US speaks volumes on how much power corporations have. Imagine their stronghold over the rest of the world?

[Chris Ryser]

Chris, I applaud your thinking, but the retail world has changed drastically. Your model is destined for failure.

Good post lensmanmd...............................

My model would be the mathematical perfect solution, because the retailer would still come out at a similar end result and correct the online opticals pricing, were any follow up is missing.

I would be happy to see more other solutions to come up on Optiboard, maybe somebody has a much better way of fending off the avalanche that is forming visibly by now.