MILAN (Reuters) – Eyewear maker EssilorLuxottica extended its partnership with Armani in a sign of continuity on Wednesday as it held its first capital markets day since the death of chairman and main shareholder Leonardo Del Vecchio in June.
The owner of the Oakley and Ray-Ban sunglass brands extended its licensing deal with Giorgio Armani’s luxury group for a further 15 years.
The partnership dates back to 1988 when Del Vecchio and the renowned fashion designer teamed up to bring Armani-branded glasses to a global market. The move is widely seen as driving a revolution that helped to turn glasses into a fashion accessory rather than a medical device.
Del Vecchio, who founded the frame manufacturer Luxottica in 1961 and built an industry leader that merged with French lens maker Essilor in 2018, died three months ago at the age of 87.
His right-hand man and chief executive Francesco Milleri immediately added Del Vecchio’s role as chairman to ensure a smooth transition for a group that employs 180,000.
“In keeping with Leonardo Del Vecchio’s vision, with Armani we inaugurate a new long-term partnership model that will anchor us in the same spirit for many years to come,” Milleri said in a statement.
COST PRESSURES
The company also said it was dealing with the impact of rising costs, in common with other businesses.
“Energy inflation is impacting strongly (in) EMEA which is important for luxury made in Italy,” Chief Operating Officer Giorgio Striano told analysts.
The company had some protection because many of its frames and lenses were actually produced outside of Europe in areas where energy inflation was more contained, but he added that wage inflation was an issue everywhere.
However, Milleri said the company was not transferring higher costs to consumers through price increases because of efficiency measures it was taking.
Milleri also took the reins of Del Vecchio’s 27 billion euro holding company.
In addition to a 32% stake in EssilorLuxottica, the Delfin holding is a major shareholder in Paris-listed Covivio and a key investor in three top Italian financial companies Mediobanca, Generali and UniCredit.
After sound revenue growth and strong margin expansion in the first half of the year, EssilorLuxottica confirmed in July its medium-term targets for an adjusted operating profit between 19% and 20% of revenue by 2026, up from 17% in 2021.
(Reporting by Claudia Cristoferi in Milan and Mimosa Spencer in Paris; Editing by Keith Weir)
