Does Luxottica Own 80% of the Eyeglass Industry? : snopes.com - snopes.com

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Welll, I am not an economist, but if we know the total amount of the US spectacle industry and what Lux in US does in a year, wouldn't that be enough to give their percent of the industry?
 
Welll, I am not an economist, but if we know the total amount of the US spectacle industry and what Lux in US does in a year, wouldn't that be enough to give their percent of the industry?

Smart girl (no condescension implied to the PC police).
 
Smart girl (no condescension implied to the PC police).
Tried to Google figures but couldn't find Lux US turnover for a year. But thanks. I still feel like a girl but probably can't pass for a highschooler anymore. :D
 
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But thanks. I still feel like a girl but probably can't pass for a highschooler anymore. :D

LOL--well maybe a college co-ed or grad student. You are still a girl from my vantage point (respectfully stated) :)
 
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It's a bit odd that the article cites the source as saying Lux owns 80% of the HIGH END optical segment and then died that the video in question misquotes that as Lux owns 80% of the eyeglass industry and Snopes concludes it's undetermined after showing sources that contradict that.
 
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The Snopes piece also cites an article in Forbes:

Meet the Four-Eyed, Eight-Tentacled Monopoly That is Making Your Glasses So Expensive

As my fellow four-eyes will know, buying new glasses can be an expensive undertaking. The fanciest frames at LensCrafters often sell for $400-500. Holding those little assemblages of glass, metal, and plastic that cost $25-50 to make in your hand, you might wonder how exactly you were roped into paying so much.

The answer is basic economics. Most frames are manufactured by a single company, named Luxottica. The Italian company makes frames and sunglasses for an amazing list of brands and stores, including

Prada

Chanel

Dolce & Gabbana


Versace

Burberry

Ralph Lauren

Tiffany

Bulgari

Vogue

Persol

Coach

DKNY

Rayban

Oakley

Sunglasses Hut

LensCrafters

Oliver Peoples

Pearle Vision

Target Optical

Sears Optical

MORE:

Luxottica controls 80% of the major brands in the $28 billion global eyeglasses industry. This monopolistic structure of the market leads to profits that are “relatively obscene,” says Tim Wu, a professor of law at Columbia University and the author of The Master Switch. In a speech given at this year’s annual conference for New America, a Washington, D.C.-based think tank, Wu remarks that products in some industries seem to only get better and cheaper — laptops, for example — while other products, like eyeglasses, remain strangely pricey, with only superficial innovation.

In certain industries, monopolies can be appropriate and natural – the power sector, for example, where it costs less for one company to set up and run a power grid than it would for multiple companies to set up competing power grids. But monopolies have no place in a low-tech consumer product market like that for eyeglasses. In this environment, monopolies create a very cynical form of capitalism – giving consumers merely the illusion of choice rather than choice itself, and extracting a lot of money from them in the process.

The easiest way to bust a monopoly like this is for consumers to recognize that they are being overcharged and patronize competitors. Warby Parker, which is mainly an online sales room for glasses, is putting up some competition, but the atmosphere remains rarified.

Many people, Luxottica representatives included, often explain away the high price of glasses by arguing that consumers are willing to pay a lot for something they wear on their faces 15 hours a day. But even if consumers are willing to pay high prices, that doesn’t mean that they should. Prices are determined in large part by the structure of the market.


WEBLINK:
 
Reader comments for above article in Forbes:

Maria 2 years ago

You’re missing a few facts — such as the cost to run a brick & mortar, and that most optical stores only sell about 15-25 pairs per day… they have to keep an enormous amount of inventory, staff (often with an optician on site), and pay rent and utilities. The margin on the actual product sold may be high when you’re only factoring in the cost of manufacturing and materials, but not when you factor in the cost to run a business.

Warby Parker may be the media darling (and goodness knows you’re all drinking the kool aid), but they have also realized the limitations to an internet model — you can’t have 5 times your sales in inventory to keep up with “at home try ons” — hence the long wait times to try on their most popular frames, up to 3-4 weeks. This is probably whey they’re opening stores in their highest density markets. This will impact their price model over time… just wait.

It sounds like you’re not familiar with the lens technologies that have been occurring over the past decade or more — since you seem to downplay eyeglass technology. Take a look at the patents out there, there are thousands of them. Yes, I know – -Warby Parker has you believing lens technology hasn’t changed since Ben Franklin. They’re wrong. You’re not wearing thick glass lenses anymore. You probably can get a lens to work in any frame you want — this has taken innovation in material science. You should also try to understand the advancements made in progressive lens technology that now allows wearers to have customized progressive lenses (customized or individualized to their own eyes which allow them to see more in focus and have their eyes adapt more easily, there are also special progressives for anti-fatigue and computer use, and, in some markets (Asia), progressives that slow down the progression of myopia in children… oh, sorry, Warby Parker doesn’t offer any of these) and if you’re under 40-years old, it’s probably not something you’re concerned about yet (just wait!). Now take a look at the advancements in coating treatments — anti-fog, anti-smudge, high quality anti-reflectives, better and faster photochromics, etc. — again, most are NOT offered by your young friends at WP.

The real problem we have here is that Warby Parker has changed the narrative by creating a David vs. Goliath story, and the media — too lazy to actually speak to optical professionals and industry execs — laps it up. Until recently, all WP offered were single vision lenses. Yes, those are the most commoditized, lowest technology ones — yes, these are the ones you praise. And, WP relies on your local optician or optometrist to provide services, e.g. eye exams or eyeglass adjustments, for you — often hoping you’ll ask for these services for “free” so they don’t have to figure that into their cost model. It’s pretty easy to build a low cost model if you offer the lowest technology and outsource the value-added services, no isn’t it?

Next time, please do your homework.
 
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Another reader comment:

Joe 2 years ago

This article has so many errors I do not know where to begin. Lux is big but nowhere near a monopoly. Their global revenues are $10 billion and they control nowhere near 80% of the market. Ms. Swanson is being spoon fed bad data by Warby Parker who likes to call Lux the evil middleman, but is itself a middleman. WP buys cheap frames from China (cost approx $5 ) and insert cheap Chinese lenses (cost approx $1.50) and sell them to the public for $95. And by the way, they tell customers to take their cheap glasses to a trained optician at a non-Warby shop to adjust them so they fit properly. Do some investigative reporting and you will discover the real truth. While Lux has rightfully earned the dislike of many in the optical world, let’s be honest. And even more irritating to those in the optical business is the willingness of members of the media to regurgitate information that has been spoon fed them by Warby Parker.
 
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My problem with lux is the insurance aspect. They own the insurance that tells the people to go to thier location that then sells them their frames. Vertical integration with no consumer choice.

As far as cost, people obviously forget that you are getting a custom made piece of work. If it was one size fit all, like readers, then yes they can be cheaper.
 
Those comments are spot on.

I don't like vertical, either, but it's not illegal or immoral. It's just stupid for employers to pay for a discount.

But we started it.
 
The Snopes piece also cites an article in Forbes:

Meet the Four-Eyed, Eight-Tentacled Monopoly That is Making Your Glasses So Expensive

As my fellow four-eyes will know, buying new glasses can be an expensive undertaking. The fanciest frames at LensCrafters often sell for $400-500. Holding those little assemblages of glass, metal, and plastic that cost $25-50 to make in your hand, you might wonder how exactly you were roped into paying so much.

The answer is basic economics. Most frames are manufactured by a single company, named Luxottica. The Italian company makes frames and sunglasses for an amazing list of brands and stores, including

Prada

Chanel

Dolce & Gabbana


Versace

Burberry

Ralph Lauren

Tiffany

Bulgari

Vogue

Persol

Coach

DKNY

Rayban

Oakley

Sunglasses Hut

LensCrafters

Oliver Peoples

Pearle Vision

Target Optical

Sears Optical

MORE:

Luxottica controls 80% of the major brands in the $28 billion global eyeglasses industry. This monopolistic structure of the market leads to profits that are “relatively obscene,” says Tim Wu, a professor of law at Columbia University and the author of The Master Switch. In a speech given at this year’s annual conference for New America, a Washington, D.C.-based think tank, Wu remarks that products in some industries seem to only get better and cheaper — laptops, for example — while other products, like eyeglasses, remain strangely pricey, with only superficial innovation.

In certain industries, monopolies can be appropriate and natural – the power sector, for example, where it costs less for one company to set up and run a power grid than it would for multiple companies to set up competing power grids. But monopolies have no place in a low-tech consumer product market like that for eyeglasses. In this environment, monopolies create a very cynical form of capitalism – giving consumers merely the illusion of choice rather than choice itself, and extracting a lot of money from them in the process.

The easiest way to bust a monopoly like this is for consumers to recognize that they are being overcharged and patronize competitors. Warby Parker, which is mainly an online sales room for glasses, is putting up some competition, but the atmosphere remains rarified.

Many people, Luxottica representatives included, often explain away the high price of glasses by arguing that consumers are willing to pay a lot for something they wear on their faces 15 hours a day. But even if consumers are willing to pay high prices, that doesn’t mean that they should. Prices are determined in large part by the structure of the market.


WEBLINK:
Again these articles have to qualify it with 80% OF MAJOR BRANDS. What does that mean? Any articles complaining about their price of $5000 Chanel handbags?

Professor Wu, try going to Zenni optical then lecture about the optical industry and high prices in optical and low prices in computers and innovation. Are you wearing the latest technology in neckties?
 
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