Monday, January 16, 2017

Essilor-Luxottica, a new group of high-frame – Liberation

It was beautiful to be in the world of optical glass, the transparency is not always required. None of the leaders of the French Essilor has not wished to respond to the questions of Liberation on the gigantic operation concluded Sunday evening, the company merged with the giant Italian eyewear frames Luxottica. The financial director, Geraldine Picaud, was conspicuously absent, while the former CEO Xavier Fontanet has been cracked by a “no comment” about the deal finalized by his successor, Hubert Sagnières. Himself unreachable.

For the financial markets, this wedding is downright princely. Essilor, the world’s number 1 ophthalmic lenses to 6.7 billion turnover, and the wife of a producer of frames in the portfolio of brands is very impressive : Ray-Ban, Oakley or Persol in sunglasses. Excluding luxury brands such as Chanel or Versace, which are manufactured, under license, their models are part of the eyewear Italian. The new set is expected to weigh 15 billion euros of turnover and is roughly 140 000 employees. Its value on the Paris stock Exchange will be $ 46 billion, for the moment, because the markets have the eyes of Chimene for this deal.

bitter Pill

For those who work in one or the other of the two companies, the pill may be slightly more bitter to the extent where the CEO of Essilor, announced Monday, of synergies, of the order of 400 to 600 million euros. Without specifying the sites that would be affected by duplicates or would be deemed too small. History does not upset the French authorities, already chagrinées through the acquisition of Alstom by the american General Electric, the cement Lafarge by the swiss Holcim and the Club Méditerranée by chinese Fosun, the focus is on the future headquarters in Charenton (Val-de-Marne), where already resides Essilor. It would seem that the quest for development, Luxottica in the optical glasses have accelerated the process of merger of the two companies. the “Three plants state of the art lenses are scheduled in Cincinnati, in China and in Italy, it is not impossible that it has accelerated the discussions, which lasted for more than two years”, considers A lain Mikli, who returned from a trip to the headquarters of Luxottica. This entrepreneur, who has created a brand of glasses top of the range its name, and a network of shops sold all the giant Italian five years ago.

The appetite of Luxottica and the market share of Essilor are precisely of a nature to worry about the 12 000 opticians who distribute their products in france. The first of which Alain Afflelou. the “They were successful in the triptych productions of glasses, frames and distribution because Luxottica also operates 7 500 stores, including the United States. I am in the wait and see, they are going to impose on us volumes, it may be difficult for opticians independent, considers the founder of the group that bears his name. in We will try to further develop our brand which already represents 25% of our sales.” The pressure may be high on retailers, who will now have to accept the terms and conditions of the group if they want to continue to offer the range of brands of the Italian manufacturer. Not to mention that the phrases “two in one” can be directly designed. the “On the Italian market, opticians offer glasses already Ray-Ba n-equipped glass Ray-Ban, all provided by Luxottica”, details Mikli. Stores French could therefore be offered mounts fitted directly to optical glasses corresponding to the correction level of their customers. The margins of retailers in French would then be revised downward, as they would do more for the assembly and the adjustment of glasses.


On the other hand, consumers should find their account : “Luxottica and Essilor are not competitors, but complementary. The merger of their activities should therefore lead to a decrease in the price glasses-frame compared to the rate charged when these two companies were separate”, says François Lévêque, professor of economics at the Ecole des mines de Paris, specializing in competition issues. In response to this new concentration, some independent producers intend to draw their pin of the game. Glasses Lafont occur each year, 300,000 frames from a factory in the Jura. Today, 70 % of its production is its international customers. In France, the brand is based on four own stores and a network of stores, multi-brand. The merger should not fundamentally change its economic model. the “We are a family run business. We will continue to discuss directly lunetiers to opticians”, considers Matthew Lafont, the son of Philippe, the founder of t he company that achieves 25 million euro turnover and employs 120 employees.

there Remains a question of size : the attitude of the Directorate general for competition in Brussels. The fusion of the glass, frames and opticians creates t-she of the situations of abuse of a dominant position ? the “The two companies are competing in some market segments, such as the sunglasses, they may therefore be forced to have to sell a few activities to bring themselves into compliance”, writes François Lévêque. Response in a few weeks.

Franck Bouaziz


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