As Reuters reports the French luxury goods group LVMH will set up a design and manufacturing joint venture with the spectacles maker Marcolin, and take a ten percent stake in the Italian company, to give it more control over its prestigious eyewear brands. With this development LVMH is trying to follow rival Kering’s lead in moving away from the traditional licensing model, which boosts eyewear manufacturers’ sales while brand owners earn royalties.
Marcolin told in a statement it would make eyewear for LVMH’s Celine and Louis Vuitton brands from 2018, aiming to gradually become the French group’s preferred partner in the eyeglasses business.
The move could be a blow to Italy’s Safilo Group, which currently holds LVMH licenses worth 340 million euros ($366 million), more than a quarter of its annual sales.
LVMH will own 51 percent of the joint venture
LVMH will own 51 percent of the joint venture with Marcolin. As part of the deal, LVMH will subscribe to a reserved 22 million euro ($24 million) capital increase at Marcolin, taking a stake of around ten percent.
LVMH’s move is expected to have little impact on market leader Luxottica. It makes glasses for LVMH-owned Bulgari but analysts estimate they account for less than one percent of Luxottica’s 9 billion euro annual sales. Adding pressure on Safilo, Luxottica’s growth prospects have been strengthened by its planned merger, announced last month, with top lens producer Essilor to create an eyewear powerhouse.
LVMH could not be reached for comment yet. CEO Bernard Arnault said last week the group would unveil its new eyewear strategy later this year. Safilo CEO Luisa Delgado told Reuters last week that the group would be able to make up for the loss of LVMH licenses by expanding its own brands and striking new deals.