Eyewear Industry Overview by Luxottica - 2010

June 3rd, 2010

Eyewear Industry

Overview

Eyewear

Brand celebrationTrusted relationship

A peculiar business

Need for

reassurance

Impairment

recognition

Self

expression

vs Medical

tool

In Store

Guerriglia

Medical procedure Fashion accessory

Business drivers

• Aging in developed markets

• Growth in emerging markets

• Different penetration rates in each market; in emerging

markets, penetration rates are much lower than

improvements in disposable income:

> Average eyeglasses penetration rate is 67% in the

U.S., 35% in Europe, below 20% in Asia-Pacific

Population Geography

Eyewear industry drivers

• Plenty of significant new markets opportunities:

> New Europe + Russia

> China

> India

> Gulf

> Turkey

> Mexico

> Korea

Fashion Sector-specific

• Vertical integration:

> Frames manufacturers acquiring retailers with labs

> Lens producers acquiring labs

> Eyewear retailers strengthening their lab networks

• Consolidation:

> Market share of the US top ten optical retailers from

16.5% in 1993 to 29.2% in 2004

• Product Innovation and technology:

Frames but mainly lenses: progressive, AR

Laser surgery

• Increasing importance of fashion content in developed

markets:

> Europe and Japan have long led the way

> U.S. consumers are now discovering fashion and luxury

in increasingly larger numbers

• Booming demand for fashion from emerging markets;

for example:

> China: demand for branded optical frames is expected to

> triple in the next 5 years

> Russia: already one of the fastest growing markets for

fashion goods

Eyewear evolution

• Worldwide continuous growth of premium and luxury segments

• Massive entry of designer fashion

brands and overall explosion of total

number of brands in the category

• Eyewear key strategic lever for

luxury brands

• From pure function to fashion

accessory: new game, new rules,

new retail environment

Channels of Trade

Diversified channels of trade

• Chains (Sun and Opti)

• 3O’s

• Department Stores

• Sun Chains

• Optical Chains

• 3O’s

• Sport

• Sun Specialist

• Department Stores

Mainstream independents

Luxottica: A great evolution in distribution approach

• Traditional sales

organization by brand

• Standardized point of

sale materials

• Extensive distribution

coverage

Trend-setting independents


• Selected by location and

quality of the point of sale

• Centrally-managed

relationship

• A customized, dedicated

program of brand

visibility


Chains and buying

groups



• Annual planned sales

and visibility program

• Supply chain initiatives

• Central and local key

accounts-dedicated

teams


Travel retail

Chains and buying

groups



• Worldwide sales channel

management approach

with a corporate-level

dedicated team

• Promoting eyewear in a

multi-category

environment

• Tailor-made marketing

and visibility activities


Dept.

stores

Travel retail

Chains and buying

groups



• Dedicated sales teams in

North America, Japan,

Europe and the Middle East

• Permanent high-quality

fixture program

• Sales associates brand-

specific training program


Lifestyle

Number of

doors

100,000-

140,000

Luxottica: Global coverage, selective distribution

200,000 doors worldwide, with a different distribution strategy by brand

Market coverage Distribution strategy by brand

Lifestyle

Number of

doors

100,000-

140,000



Fashion60,000-

100,000


Lifestyle

Number of

doors

100,000-

140,000



Fashion60,000-

100,000

Premium

Fashion

15,000-

25,000


Lifestyle

Number of

doors

100,000-

140,000



Fashion60,000-

100,000

Premium

Fashion

15,000-

25,000

Luxury8,000-

12,000


THANK YOU