Luxottica is an Italian company that controls pretty much every aspect of the global sunglasses and eyewear industry. Some people would describe Luxottica as a monopoly. I am one of those people. To give you a sense of Luxottica's monopoly, indulge me for a moment with an imaginary trip to your local Sunglass Hut.
Picture yourself walking through your local mall. As you pass Abercrombie, with the smell of Auntie Anne's wafting through the air, you see a Sunglass Hut off in the distance. It hits you that you need a new pair of sunglasses for an upcoming vacation. So you walk on in. Now picture all the sunglasses stacked neatly on the walls. You see brands like Ray-Ban, Oakley, Arnette and Persol. As you turn over the little price tags, a feeling of anxiety runs through your veins. How is it possible that the cheapest item in Sunglass Hut is $200???
Your anxiety shoots up another notch when you turn over the price tags on designer glasses from brands like Gucci, Burberry, Bulgari, Coach, Giorgio Armani, Chanel, Prada, Armani, Versace, Michael Kors and Dolce & Gabana. The price tags for these items range from $400 to $900. I'm on Sunglass Hut's website right now looking at a pair of Gucci sunglasses that somehow cost $1,320.
Want to know a dirty little secret?
Ray-Ban, Oakley, Arnette and Persol? These brands are 100% owned by Luxottica.
The glasses from designers like Gucci, Burberry, Bulgari, Coach, Giorgio Armani, Chanel, Prada, Armani, Versace, Michael Kors and Dolce & Gabana? Thanks to lucrative and favorable licensing arrangements, these are also essentially owned by Luxottica.
Oh, and guess who owns Sunglass Hut? Luxottica.
Oliver Peoples? Luxottica.
LensCrafters? Luxottica.
Pearle Vision? Luxottica.
Target Optical (the eyeglass stores inside Target)? Even that is owned by Luxottica.
How did Luxottica acquire such an enormous monopoly? Decades of consolidation through mergers and acquisitions. Sometimes unhappy acquisitions.
Lucas White Smith wearing Ray-Bans (Photo by Daniel Zuchnik/Getty Images)
[Note: The person in the photo above is not the youngest billionaire on the planet. That's an influencer named Lucas White Smith. As far as I could tell there are only two photos of the person Clemente Del Vecchio who we talk about later in the article. But they were not able to be licensed and I needed something for the cover image]
Over the years, it has been alleged that independent brands have been coerced into selling themselves to Luxottica under not-so-veiled threat of "if you don't let us acquire you for a price we set, your products will not be sold in our global stores."
Take Oakley for example.
After being founded in the late 1970s by Jim Jannard, Oakley became enormously popular and successful in the 1990s as they began appearing on the faces of celebrities like Michael Jordan, Dennis Rodman and Tom Cruise. Oakley went public in August 1995. A few months later, Luxottica suddenly stopped carrying Oakley products in all of its global stores. Oakley's stock price plummeted. The battle between the two companies lasted until 2007 when Oakley finally relented and sold itself to Luxottica for $2.1 billion, a price that in retrospect many consider puny.
E. Dean Butler is the founder of LensCrafters. He founded the company in 1983 and a year later, when it had just three locations, Butler sold to a company called U.S. Shoe. In 1995 LensCrafters was purchased in a hostile takeover by Luxottica for $1.4 billion. In a 2019 interview, E. Dean Butler claimed that Luxottica's monopoly consolidation has resulted in 1,000% markups in the eyewear industry. Butler lamented how perfectly great sunglasses could easily cost $15, but instead we've been conditioned to think it's normal to spend $900 on designer frames. Butler called today's sunglasses industry "ridiculous.. a complete rip-off."
From Rags to the Richest Person in Italy
For decades, the primary beneficiary of those $900 sunglasses was Luxottica's founder Leonard Del Vecchio.
Leonard Del Vecchio was born in Milan, Italy in 1935. He was born into such wretched poverty that his mother literally couldn't afford to feed him and was forced to abandon him to an orphanage. Leonardo left the orphanage in his teens and began an apprenticeship at a tool and die maker. He then switched to making spare parts for eyeglasses.
He founded Luxottica in 1961. The company's major revelation in those early years was the idea that sunglasses and eye glasses could be stylish and cool. Before Leonardo and Luxottica, eyewear was bland and functional. Style was not a factor.
When Leonardo Del Vecchio died on June 27, 2022 at the age of 87, his $30 billion net worth made him the richest person in Italy.
Leonardo Del Vecchio in 1995 (Getty Images)
The Youngest Billionaire in the World
Leonard0 was survived by his second wife, Nicoletta Zampillo, and six children from three relationships. His six children ranged in age 18 to 65 at the time of his death. His two youngest children, Clemente and Luca, were born to Sabina Grossi. Sabina at one time was a Luxottica Board Member and the company's head of investor relations.
Today Nicoletta Zampillo (his widow) and his six children, are each worth…
$4 billion
Best of all, Leonardo's holding company was based in Luxembourg which doesn't assess an inheritance tax even on people who are not residents of the country. To further protect his assets from taxes, Leonardo was physically living in Monaco at the end of his life, another very inheritance-tax friendly locale.
That is how each of his children and his surviving widow inherited equal stakes in his former empire that are worth $4 billion a piece today.
And that $4 billion fortune makes 18-year-old Clemente the youngest billionaire in the world. Clemente's 21-year-old brother is the second-youngest billionaire in the world.
Imagine telling 18-year-old metal apprentice Leonardo Del Vecchio in the 1950s that roughly 70 years down the road he would die the richest person in Italy with a fortune so large that even after being split seven ways, his direct descendants would all become billionaires. One of whom would be the youngest billionaire on the planet.
Congrats to Clemente, Luca and all of the Del Vecchio heirs. You might be the only people on the planet who can walk into a Sunglass Hut and not scoff at the prices.
