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Eye Glasses Monopoly |
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One company, Luxottica, dominates the world market in eyeglasses and monopolizes the business. If you don't go to places like Walmart or Costco, you could easily be spending hundreds of dollars for a pair of glasses that cost $30 ten years ago. Ray-Bans, Oakleys, glasses for running, and skiing, and even reading. You'd think the competition would force the prices down. One reason it hasn't is a little known but very big Italian company called Luxottica the biggest eyewear company on earth. At least half a billion are wearing Luxottica glasses now. Last year, Luxottica made some 65 million pairs of sunglasses and optical frames. They don't make prescription lenses. Luxottica has Prada,. Chanel,. Dolce Gabbana,. Versace,. Burberry,. Ralph Lauren,. Tiffany,. Bulgari... Vogue line which is not that expensive. Coach., which is much more expensive. If two women walked down the street with these on you wouldn’t know the difference. Also Persol and Tory Burch. Chanel Cs, Polo ponies, or Tiffany blue. Luxottica wouldn't tell us their markup, but glasses like these can sell for up to 20 times what they cost to make. Listed on the New York Stock Exchange where Luxottica shares are soaring. The company raked in $8 billion last year. But their best seller wasn't a fancy fashion house label. It was a brand they outright own: Ray-Ban. Today those $29 pairs can cost $150 and more, and Ray-Ban is the top-selling sunglass brand in the world.
Andrea Guerra: You could say Walmart. Also Costco and emerging on-line companies like Warby Parker. But other competitors told us Luxottica has them in a chokehold: if you make glasses, you want to be in their stores; and if you have stores, you want to sell Ray-Bans! So Luxottica can set the prices as high as it wants. Which he says is why glasses in general cost so much, even at your local optician's. Brett Arends: The whole point of a luxury brand is to persuade people to pay $200 for a product that cost $30 to make. You'd think well, surely insurance companies covering vision would complain. But guess what? Luxottica also owns the nation's second largest vision-care plan: EyeMed, covering eye exams and glasses. See the 60 Minutes Interview http://www.cbsnews.com/8301-18560_162-57527151/sticker-shock-why-are-glasses-so-expensive/ |
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