A Channel 4 retail documentary has claimed that Luxottica controls 80% of ‘designer’ sunglass brand retailing and that some its frames cost just £10 to manufacture.
Aired yesterday evening (February 22), the feature on the Italian eyewear giant appeared on consumer retail programme Supershoppers, which Channel 4 said uncovered the tricks of the retail trade.
In the feature, the presenters explained how Luxottica controlled the design, production and retailing of the sunglasses through Sunglass Hut. ‘It's the stuff of dreams for big business,’ said presenter Andi Osho. ‘Luxottica control the whole process from design studio to shop floor.’
In a series of vox pops, members of the public were asked how they felt knowing that each designer brand had actually been produced by the same corporation. One couple felt that the products were less authentic.
Interviewed during the segment, Bloomberg Business reporter Andrew Roberts said the company could manipulate what consumers would pay for sunglasses through ownership of the majority of the brands. ‘They’re controlling the choice that you have, to a certain degree,’ he said. ‘In the case of Sunglass Hut, if you’re looking at what they’re actually selling in their stores, most of the eyewear is their own. They can set their pricing as they see fit.’
Roberts also claimed basic plastic frames cost under £10 to produce, with other frames constructed from titanium costing up to £50 and retailing for £350.
A Luxottica spokesperson said it was not the case that it controlled 80% of the designer sunglass market, as its portfolio totalled only 30 licensed and proprietary brands in a market of thousands. It said data provided by strategic market research firm Euromonitor International showed that of the 954m frames produced worldwide in 2015, 93m were manufactured by Luxottica – less than 10% of market volumes.
Research data from Euromonitor International also suggested that 39% of total frames sold last year were sunglasses. Luxottica said sunglasses represented approximately two thirds of its sales, meaning the company produced approximately 16% of sunglasses on the market.
Channel 4 told Optician that the source for the 80% of designer brands headline figure was Andrew Roberts, along with a Forbes.com article about the company and brand authenticity published in 2012. Luxottica said the data in article in question had ‘no supporting evidence.’
Roberts and an ‘internal source’ were reported to have supplied the information on manufacturing costs.
Luxottica said matters surrounding the cost of frame manufacturing were complex and heavily industry related, and declined to comment further.