Luxottica signs exclusive 10-year license agreement with Michael Kors

Luxottica Group SpA, the world's largest eyewear company, yesterday said that it had signed a ten-year exclusive eyewear license agreement with luxury-goods company Michael Kors Holdings Ltd.

Under the agreement, Luxottica will produce eyewear for both the Michael Kors Collection and MICHAEL lines, beginning in January 2015.

The brand's two luxury eyewear collections will be sold in Michael Kors stores, department stores, select travel retail locations, independent optical locations and Luxottica's retail stores across the globe.

The deal will allow Michael Kors, known for its luxury accessories and ready-to-wear, as well as its iconic jet set lifestyle, to continue the global expansion of the brand's eyewear business.

Founded in 1981 by fashion designer Michael Kors, the eye-wear company designs luxury accessories and ready-to-wear of products, including accessories, footwear, watches, jewellery, men's and women's ready-to-wear, and a full line of fragrance products.

The Hong Kong-based company, which has a market cap of $18.22 billion, operates stores either directly or through licensing partners, in New York, Beverly Hills, Chicago, London, Milan, Paris, Munich, Istanbul, Dubai, Seoul, Tokyo and Hong Kong.

''We have achieved great success in the eyewear business and believe that our new partnership will further enhance our luxury image in the optical and sunglass marketplace,'' said John Idol, CEO of Michael Kors.

''We are very excited and proud to be entering this new partnership with Michael Kors, one of the most powerful American luxury lifestyle brands in the world,'' said Andrea Guerra, CEO of Luxottica.''

A low-key company, Luxottica holds total domination over the global eyewear market by buying out its rivals.

It makes prescription frames and sunglasses for nearly every designer brand, from Chanel to Prada and, to Ralph Lauren and Versace.

Started in small tool shop by Leonardo Del Vecchio in Agordo, Italy in 1961, Luxottica now has an annual turnover of $8 billion. It sold 65 million pairs of frames last year.

With over 65,000 employees, Luxottica has 7,042 stores across 130 countries, including India.

The company's products are designed and manufactured at its six plants in Italy, two wholly-owned plants in the China, one each in Brazil and the US.

It acquired Ray-Ban in 1999 and managed to turn the $29-a-pair gas station brand into the world's top-selling sunglasses.

Its own brands include Oakley, Persol, Oliver Peoples, Arnette, REVO, Vogue and K&L (formerly Killer Loop).

The New York and Milan Stock Exchanges-listed company also makes 20 licensed brands for some of the best known names in the global fashion and luxury industries, including Burberry, Polo Ralph Lauren, Stella McCartney, Tiffany, Versace, Vogue, Miu Miu, Tory Burch and Donna Karan.

Apart from making glasses, Luxottica also owns nearly every major retail outlet that sells eyewear, including prescription eyewear chains LensCrafters and Pearl Vision. It also owns Target Optical, Sears Optical, Sunglass Hut - the world's largest sunglass chain and EyeMed, the second-largest vision care insurer in the US.

Due to lack of competition, Luxottica routinely sells eyecare glasses at over $200 although it cost less than $30 to make.

Last month it announced that it would partner with Google on the development of internet-connected Glass eyewear called Google Glass and integrate it into Luxottica's eyewear. (See: Google, Luxottica in deal to manuacture Google Glass eyewear)