This episode explores EssilorLuxottica, a global eyewear leader formed by the 2018 merger of Essilor and Luxottica. Against the backdrop of this significant merger, the discussion analyzes the company's vertically integrated business model, spanning design, manufacturing, distribution, and retail, across both vision care and eyewear fashion. More significantly, the conversation delves into the financial performance, revealing a 75/25 revenue split between lenses and frames, respectively, with higher profitability in the more concentrated lenses market. For instance, the podcast examines the company's pricing power and competitive landscape, comparing its gross margins to those of competitors like Nike and Adidas, and contrasting its scale and vertical integration with the direct-to-consumer model of Warby Parker. As the discussion pivoted to strategic acquisitions, the rationale behind the Supreme brand acquisition was explored, highlighting the potential synergy with smart glasses technology. Finally, the podcast concludes by emphasizing the importance of scale, vertical integration, and disciplined decision-making in EssilorLuxottica's success, offering valuable insights for investors and operators in similar industries.
