When fashion giant Kering announced that it was creating an internal eyewear division to handle distribution and sales of its fashion brands in the summer of 2014, it wasn’t just the fashion industry that sat up and took notice. The announcement led to the early termination of licensing agreements with some of the major international eyewear manufacturers for major brands such as Gucci and Yves Saint Laurent. In one fell swoop, another major eyewear player had joined the top table.
Specialist expertise
Prior to joining Kering, Vedovotto was twice CEO of Safilo Group. From 2002 to 2006, he was responsible for the restructuring of the organisation and subsequent listing on the stock exchange. From 2009 to 2013, he grew the firm to a multi-national enterprise and brought high-level managerial competence to the post. He blends specialist expertise in the eyewear industry with a knowledge of the fashion and luxury world, and top-level contacts with other luxury companies.
Simon Jones [SJ] What has been the reaction to the launch of Kering Eyewear and what has been the company’s focus over the past 12 months?
Roberto Vedovotto [RV] We have received a lot of attention from all the distribution channels which are viewing us with a lot of interest.
We have already established a direct presence through subsidiaries in 11 key countries (US, Hong Kong, China, Japan, Singapore, UK, Germany, Austria, Switzerland, France and Spain) and we have set up agreements with a highly selective network of distributors in countries where we do not yet want to have a direct presence. Retail will be managed through Kering brands’ directly operated stores while wholesale distribution will be handled through specialised independent opticians, national and international chains, department stores, retail travel outlets, e-tailers and brand franchisees.
Kering Eyewear is approaching the market with a sales model more akin to the fashion industry than that used in the optical sector up to now.
[CaptionComponent="2153"][CaptionComponent="2154"][SJ] How will Kering Eyewear differentiate itself from other eyewear companies?
[RV] By bringing back all licenses in-house we will be able to invest more in our brands, take full control of the value chain, innovate the selective distribution approach to markets and maximise synergies within the group from both a product development and a sales standpoint. We are now able to design and produce collections that are more aligned with each brand’s DNA by working closely with the creative directors of each brand.
Eyewear is already a fundamental accessory but we aim to make it core for our brands, and even more strategically relevant and aspirational for our final consumers. With our long term outlook, we will be able to build a strong partnership with our customers, providing them with outstanding collections and the highest possible service level.
We are not another eyewear company and we aim to become the first luxury company to enter directly into the eyewear market. We treat every single detail, every element of the distribution, the marketing, the sales tools, and the customer with the same care and attention given to the brands – a luxury approach.
[SJ] Has the company set itself any specific targets?
[RV] What we care about most is creating value for our brands and developing the business by respecting the positioning of each brand, improving dramatically the quality of our products and offering the best service possible to our clients.
The current size of the Kering brands’ business makes us one of the top five players in this industry. Our ambition is to become even stronger by maximising the potential of each of our brands.
[SJ] Where do opticians fit in Kering’s retail strategy?
[RV] Top independents will play an important role in Kering Eyewear’s retail strategy in the UK. The way we see the market evolving means that only quality independents which are capable of offering the best brands and impeccable customer service will be able to thrive in a very competitive landscape and concentrated market like the UK. We aim to build strong partnerships with the top independents by offering the best design, craftsmanship, marketing support and customer service for all the brands in our powerful portfolio.
[SJ] What are the company’s plans for the UK market?
[RV] The approach in the UK will reflect the global strategy and focus on the high end of the market where we are the only player able to offer an ensemble of directly owned luxury and fashion brands. We are sure our customers will recognise the unique craftsmanship and the utmost attention to materials and details of our products. They will also benefit from cross category marketing campaigns, a qualitative distribution network and synergies with the brands that only a business model like ours can offer.
[SJ] What is the structure of the UK arm of the business?
[RV] Kering Eyewear has been able to put together a team of highly experienced managers that know the industry and have many years of experience within the eyewear sector. Ermes Stefanutto, our head of UK and northern Europe, has come to us with over 15 years’ experience in the high-end eyewear market and with top fashion brands in different sectors. Charlotte Abbot, is our key account manager with five years’ experience in the industry, whilst Laura Flower, is responsible for the marketing team and can draw on a solid knowledge of the eyewear market and has experience with top luxury brands in the fragrance and beauty sector.
Our project is based on a long term partnership with the trade and we will provide all the necessary support for this transition, making sure that we will always deliver the best customer service in the industry. Starting from January 2016, our brand ambassadors will cover the markets and implement our distribution strategy so that our customers will be able to learn more about our approach.
[CaptionComponent="2155"][SJ] Is the company looking to extend its brand portfolio and what will be its key brands?
[RV] For the moment our focus is on our own brands. We have introduced three additional brands for SS16, which were not active in eyewear – Pomellato, Tomas Maier and Christopher Kane. There is a lot of potential within the portfolio of brands that we own as Kering. Therefore, selectively, we will keep expanding the portfolio. At the moment we have 22 brands in the fashion side of the business and in eyewear we currently have 11, and Gucci will make 12.
Gucci is the most important brand in eyewear. It is the category leader and, by far, the largest brand. But we think there is a huge potential for growth for many of our brands while still maintaining a selective distribution according to the positioning. Slowly, we will probably consider the possibility of introducing additional brands.
[SJ] What are the company’s manufacturing plans?
[RV] Kering Eyewear does not own factories. Having the freedom to work with the best manufacturers in the market according to our brands’ needs, ensures flexibility and the highest quality standards. This is our business model.
Kering Eyewear will be able to ensure a much higher level of product quality and will be able to offer collections even more in line with each of the brands’ DNA. We partner with top producers in Italy and Japan in order to consistently deliver outstanding products.
[SJ] How will the eyewear sector evolving during the next five years and will smart technology have an influence?
[RV] The eyewear industry has not been affected by the financial crisis and will continue to grow, especially in the high-end/ luxury segment. The ophthalmic segment is growing, driven by the increased use of smartphones and tablets. Sunglasses, while growing in traditional countries, are benefitting from the consolidation and development of the middle classes in newly industrialised countries, such as China, Malaysia, Indonesia, Thailand, Brazil, Mexico and Turkey.
Eyewear is a consolidated industry, characterised by highly complex products and manufacturing processes, managed by few very specialised players through license agreements.
It is too early to say if the ‘strategic move’ we have made by internalising the eyewear category will become a real trend for our segment, but I feel that other companies are watching how we perform.
The fact that new technologies are becoming more and more necessary in our daily life, strongly influencing the way we collect and share information, together with consumers becoming highly demanding, sophisticated and driven by new trends, will influence product offering.
Research and design has always been fundamental in the eyewear segment and we will certainly continue to invest in research. In this context, smart eyewear is a strategic and a high potential segment, but I think the commercial results will take longer to show.
