Thanks to eyewear powered by artificial intelligence, EssilorLuxottica last week helped the late founder Leonardo Del Vecchio achieve his ultimate goal of a valuation of 100 billion euros, transforming EssilorLuxottica from a workshop in the Dolomites to the world’s largest eyewear manufacturer. has completed its transformation.
His successor is betting that the smart eyewear he developed with social media giant Meta will one day replace smartphones in customers’ pockets and fuel future growth.
In an earnings call last month, the sunglasses maker Ray-Ban and Oakley said its glasses, which integrate a small camera and Meta’s AI assistant, were one of the strongest drivers of quarterly sales, contributing to a boost in stock prices and increasing market capitalization. said it reached the euro. Last week it was 101.5 billion yen.
“The merger of Luxottica and Essilor was an evolution of our original vision with optics at the heart. Then technology actively disrupted our plans,” said CEO Francesco Mirelli. he told the Financial Times.
“Our next step with MetaPartner is to become a leader in the wearable computing field…we believe that (the creation of) glasses will one day replace most other technology devices,” he added. Ta.
His comments came as Essilor Luxottica hit a record valuation last week, but also came as EssilorLuxottica hit a record valuation last week. The company was forced to take action after Leonardo Maria del Vecchio became the subject of an investigation by the Milan public prosecutor’s office. Dozens of others.
Over the weekend, EssilorLuxottica expressed its “full support” to the son of its late founder. A spokesperson for Del Vecchio declined to comment Sunday. The company is not involved in the investigation.
EssilorLuxottica was formed in 2018 through a complex €50 billion merger between Italian billionaire Del Vecchio’s eyewear group Luxottica and French lens maker Essilor. Luxottica began in 1961 by manufacturing frame parts in Del Vecchio’s small workshop in the Italian village of Agordo.
The combined company has since made frames for designer houses such as Prada, Coach, Giorgio Armani and Chanel, and expanded into wearable technology and healthcare, creating a global group with annual revenues of more than 25 billion euros last year. has grown to.
The stock has fallen slightly this week and its market capitalization hovers just below 100 billion euros, but it has risen almost 25% in the past 12 months.
EssilorLuxottica’s latest generation of Ray-Ban Meta glasses allow users to livestream what they’re watching directly to Facebook and Instagram, as well as take photos and videos and automatically save them to their phone. In the US, the glasses are integrated with Meta’s AI assistant, allowing owners to ask the glasses for detailed information about what’s in front of them.
“These new technologies will one day replace smartphones, just as streaming services replace music CDs and electric cars replace internal combustion engines,” Mirelli added.
EssilorLuxottica said last month that its Ray-Ban Meta smart glasses and sun-sensitive photochromic lens brands were “key” drivers of growth in the third quarter. The company’s smart glasses, which retail for more than 300 euros, are popular on the group’s e-commerce channels and have become bestsellers in most Ray-Ban stores in Europe, the Middle East and Africa.
The group does not disclose sales figures for individual products, but direct-to-consumer sales rose 3.2% year-on-quarter to €3.4 billion, bringing total sales to €6.4 billion, up 2.3% year-on-year. It became.
EssilorLuxottica and Meta are now planning to deepen their partnership, announcing a new long-term agreement in September to develop “multi-generation smart eyewear products.” Meta is also in talks with the group over a multibillion-euro investment, with CEO Mark Zuckerberg recently announcing that Meta would take a “symbolic” 5% stake in EssilorLuxottica. He admitted that he plans to obtain one.
Zuckerberg said Meta and the Italian-French group could “become the Samsung of Europe” if they worked together.
Over the past few years, Meta has spent billions of dollars entering the wearable technology market, including developing virtual reality headsets.
Zuckerberg first approached Luxottica founder Del Vecchio in 2019 to explore a potential partnership, visiting the late billionaire in Agordo, where the company still has a factory. Mirelli said the meeting sparked negotiations on how to develop innovative products.
Mirelli said smart glasses, unlike other wearable devices, are scalable. “Temporarily cool but essentially unrelated devices have been launched by technology platforms in the past, but their appeal has been limited,” he says.
“The strength of glasses is that billions of people already wear them, and in the future many more will wear them…Whether they’re sunglasses or prescription sunglasses, is part of our daily life.”
Under Del Vecchio, who passed away in 2022 at the age of 87, Luxottica made its first attempt to develop a frame with embedded technology, but in the end it was unable to sell due to low demand. “The mistake we made 15 years ago in the early stages of developing smart eyewear was thinking that people would simply buy the technology,” Mirelli says.
Early versions of smart eyewear, including social media platform Snapchat, developed by Luxottica and others, had large, unattractive designs.
“The reality is that consumers always want accessories that look great, which is why iconic brands at the core of our strategy are more important than ever,” Mirelli said.
According to Mirelli, EssilorLuxottica currently has eyewear licenses for a number of global luxury fashion brands, and the meta-partnership has significant expansion potential. He said that “smart eyewear from luxury brands” will eventually become “part of everyday life” as technology is embedded invisibly into frames.
While the technology is promising, EssilorLuxottica and Meta may face privacy regulatory hurdles around the world, including in key markets such as China and the European Union.
Meanwhile, Mirelli’s Eyewear Group is also moving forward with transactions in fields such as medical technology, and this year acquired an 80% stake in Heidelberg Engineering, a German company specializing in ophthalmic diagnostic and surgical technology.
It also acquired an equity stake in Nikon, which specializes in precision optical and photographic equipment, and in 2022 acquired Israeli hearing technology startup Nuance Hearing to develop glasses equipped with acoustic beamforming technology.
“We are pursuing new goals and investing in eye trackers and health monitoring systems that can help prevent certain diseases,” Mirelli said.
The company also acquired US streetwear brand Supreme for 1.5 billion euros in July, expanding its portfolio beyond frames and lenses to target younger consumers.
“We started out as an eyewear manufacturer, but[eventually]we realized that eyeglasses could become a vehicle for AI, for cloud computing,” Mirelli said.
