How Kering built a start-up to disrupt the luxury eyewear market

November 4, 2016

(Photo credit: Luxeye Optical)

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After a two-year wait, Kering will finally launch its first Gucci eyewear collection to be produced in-house, following the French conglomerate's decision to terminate its licensing agreement with Safilo and bring the brand's eyewear business back into the group.

Previously, Kering brands’ eyewear collections were created through licensing agreements with external companies. But now eyewear for Gucci, along with Yves Saint Laurent, Alexander McQueen and Stella McCartney, will be produced in-house by Kering Eyewear, an internal venture that was formed to design and distribute eyewear for the group’s luxury brands. Safilo, will however still manage the manufacturing, production and supply of Gucci eyewear until 2020.

(Alexander McQueen)

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Kering Eyewear’s aim is to disrupt the market and, to do this, it is attempting to operate more like a start-up than a traditional luxury company, by responding faster to market needs, investing in research and adapting its business practices to make the most of new opportunities.

(Saint Laurent)

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The company is overseen by Roberto Vedovotto, former chief executive officer of Safilo, who joined Kering two years ago. According to Vedovotto, running Kering Eyewear like a start-up within the conglomerate will help achieve his aim to make it the world leader in high-end eyewear. “We have been given the freedom of trying to change the eyewear industry, in a solid and powerful framework,” Vedovotto told BoF in an interview at the company’s sleek London showroom.

(Photo credit: Luxeye Optical)

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"Being a new company allows us to be flexible and dynamic in responding to market needs, to exploit new opportunities [and] invest in innovation.

In the space of two years, Vedovotto has grown the Kering Eyewear team from four to 340 people and launched 11 eyewear collections to date. He expects the headcount to increase to 480 employees by the end of this year.

With the global eyewear market, which includes frames, contact lenses and sunglasses, expected to reach $140 billion by 2020, the opportunity for one of the world’s largest luxury groups is vast. But it also comes with a hefty price. In order to bring eyewear in-house, Kering paid Safilo €90 million ($100 million) to terminate its license agreement two years earlier than expected, and sacrificed around €50 million ($56 million) in royalty income. According to Luca Solca, head of luxury goods at Exane BNP Paribas, this will weigh on the company’s profit and loss margins for a number of years.