EssilorLuxottica, worth nearly €130bn, holds almost 55% of the prescription lens market.
Ray-Ban Meta glasses have sold 2m units, and Meta says it has approval for a 5% stake in EssilorLuxottica.
The 2018 EssilorLuxottica merger sparked a governance fight through 2021, while Delfin still owns just over 32%.
How EssilorLuxottica's lens dominance funds its smart glasses bet
EssilorLuxottica is the only eyewear group that spans prescription lenses, frames and retail, and that span is the investment case. Lenses are an oligopoly it dominates at almost 55%, which funds a fragmented fashion business and a vast store network, though pricing power stays moderate because half of gross margin goes to selling. The next chapter rests on smart glasses, where Ray-Ban Meta has reached mass adoption but the AI and much of the value belong to Meta. Growth investment comes before the 19-20% EBIT margin target, so near-term margin delivery is likely to wait.
Takeaways
Only eyewear group spanning lenses, frames and retail. EssilorLuxottica combines prescription lenses, 75% of revenue, with frames and sunglasses at 25%, a vertical span no rival matches. Revenue is about €26.5bn and market capitalisation nearly €130bn, and unlike LVMH none of its brands carries the corporate name.
Lenses are an oligopoly, frames and sunglasses fragmented. EssilorLuxottica holds almost 55% of prescription lenses alongside Hoya and Carl Zeiss. Frames and sunglasses are scattered, with Kering Eyewear near 10% and Safilo near 7%, and the fragmented tail takes about 40% of that market against 3% of lenses.
Ray-Ban Meta is the only mass-market smart glasses. Two million units have sold since October 2023 at about $300, and capacity is being built for 10m. The category is a $3bn market against $34bn for smartwatches, and EssilorLuxottica does not own Meta's AI technology.
High gross margins, but half goes to selling. Gross margin runs 63-64%, above Nike and Adidas but below luxury, and Ramachandran calls pricing power moderate. Half the gross margin funds selling expenses across roughly 18,000 stores and 200,000 employees, leaving a 16% EBIT margin against a 19-20% target for 2026 she expects to slip.
Myopia demand far exceeds EssilorLuxottica's reach. The company made 550m prescription lenses last year, reaching roughly 113m consumers at about €200 a year, while more than 2bn people have myopia today and 5bn are forecast by 2050. Vision impairment is about 90% undiagnosed in developing economies.
The $1.5bn Supreme deal is hard to justify. Ramachandran calls the 2024 purchase from VF Corp the most left-field deal and is not sure it was the best use of $1.5bn if the aim was selling hats and T-shirts. It may become a brand vehicle for smart glasses aimed at younger Asian consumers.
How the merger came together
Essilor introduced the Varilux progressive lens in 1959.
Luxottica acquired Ray-Ban and Oakley and held licences for Chanel and Prada.
Tap a name to go there · tap a line to see why they are linked
On this episode 3
Show 1
Leonardo Del Vecchio believed controlling the whole value chain unlocked value, so the 2018 deal was framed as a merger of equals with three years of power sharing.
The arrangement became a bitter governance battle between Del Vecchio and Essilor chairman Hubert Sagnières, running from 2018 to 2021 and settled in 2019.
Francesco Milleri is now official CEO, Paul du Saillant Essilor deputy CEO, and Delfin, the Del Vecchio family holding, owns just over 32%.