Hacker News Reader

Comment by petilon | Hacker News Reader

The reason glasses cost so much is because one company owns: (1) nearly all brand name frames including Ray-Ban, Oakley, Prada eyewear, Armani eyewear and so on, (2) nearly all retail stores such as LensCrafters, Pearle Vision, Sears Optical and Target Optical and (3) EyeMed, one of the largest vision insurance companies.

Luxottica retail brands: http://www.luxottica.com/en/retail-brands

Luxottica eyewear brands: http://www.luxottica.com/en/eyewear-brands

Luxottica vision insurance: http://www.luxottica.com/en/node/6336

See 60 Minutes story on Luxottica: https://www.youtube.com/watch?v=gDdq2rIqAlM

View on HN

In Jan 2017, Luxottica announced a merger with the largest lens maker, Essilor. EU antitrust is reviewing, https://www.reuters.com/article/us-luxottica-essilor-merger/...

In turn, Essilor has ownership in Shamir, Eyebuydirect, FramesDirect, Coastal, Coolwinks, Costa Del Mar, Elens, Eotica and Foster Grant, https://www.essilor.com/en/the-group/activities-and-distribu...

If EU regulators allow the merger to go through, one $50B company will own the most online channels for eyeglasses and contacts, in addition to lens manufacturing & retail storefronts & vision insurance.

They also own lots of optical machine building companies as well as factories all over the world. It’s pretty much impossible to be in the optical business and not buy from Essilor.

I shopped coastal to avoid them, not anymore

Yes, Dems also specifically mention Luxottica in their 2018 platform. Not that I expect them to work on it, but maybe we can see the end of high priced glasses soon.

I thought it was shady as hell when I got an explanation of benefits letter from my vision insurance (branded Aetna) with a return address of 4000 Luxottica Place.

I see an independent ophthalmologist. He stocks both Luxottica and non-Luxottica frames. Every time, they and I blindly select frames with a bias against Luxottica. Every time, I choose the Luxottica frame. Somehow, that company has cornered the market for decently-built frames for non-hipsters.

The lack of good designs for non-Luxottica brand frames is appalling. I use a third party eye glass company to order frames + lenses for < $100 and get good quality stuff (but not the best styles). Why are they not able to compete on style and fashion?

Luxottica offered to buy Oakley, and Oakley refused.. said it was never going to happen.

So Luxottica stopped distributing Oakley's products in Sunglass Hut, etc.. which deprived Oakley of the majority of it's revenue, causing their stock to crash.

Oakley then accepted a buyout offer from Luxottica.

So to answer your question, why are there not better Luxottica competitors.. because when someone produces a good product, they'll become large enough to attract Luxottica's attention...

If Luxottica controls the distribution channel.. what options do you have if they want to play hardball? No good ones.

> If Luxottica controls the distribution channel

One could have argued similarly for Gillette. Then Dollar Shave Club went direct to consumers.

Likewise, I referenced an independent distributor who stocked non-Luxottica frames. Margins in this business are wide enough that economies of scale, alone, are an insufficient explanation.

Gillette doesn't own Walgreens. That's the big difference here.

Does luxottica own Walgreens?

No, but they do own LensCrafters, Sunglass Hut, Apex by Sunglass Hut, Pearle Vision, Sears Optical, Target Optical, and Glasses.com...

Do you buy brand name sunglasses at Walgreens or walmart?

Unilever has owned DSC for over a year.

That kind of behaviour really should bring the anti-trust regulators knocking on your door sharpish. Anyone know why it didn't happen?

Because the US has not believed in anti-trust regulations in some time, especially for snakes who don't hesitate to pay (I don't remember if it was Last Week Tonight or Adam Ruins Everything which played clips of the Luxotica CEO, that bloke talks and behaves exactly as if he'd order a pallet of cement blocks and ask for a discount).

Did Oakley have their retail outlets at that time? Or did that come after the Luxottica purchase?

When I bought my Oakleys last year, most of my research was by browsing in the two Oakley retail stores in my city. Some was from browsing at surfwear stores (as far as I know, Luxottica don't own Rip Curl or City Beach).

A small portion of my shopping research was on my (Luxottica-owned) optometrist's website, but I ended up buying from the Oakley Factory Outlet store.

This article from 2007 (after the merger) says they had 250 stores out of 11,000 retail outlets that carried their products

https://seekingalpha.com/article/40333-oakley-luxottica-grou...

They don't own Warby Parker. I bought two pairs of progressive lens glasses from them. Great experience.

Interesting. I never heard that. I have been a big Oakley fan for a long time because I felt they did make nice lenses and sold them when I worked at a running store in college.

Competitors have mostly focused on alternative or direct-to-consumer distribution. So instead of picking out frames at your optician's office (where everything is Luxottica), you just get your prescription and then either go online or go to a store that direct-sells non-Luxottica.

We need Bezos to enter the market.

Same question for men's ties (though it's been a while since I've been in the market for one). Expensive ties have attractive patterns, and cheap ones have horrifying ones. But the pattern is effectively software. Is a nice tie pattern truly that hard to create?

My theory is that ugly ties are there to sell the nice (simple) ties.

I've had similar experiences with dress shirts as well. Plain nice shirts end up costing more than elaborate designs because that's the one people actually want

I've noticed this a lot in men's fashion. If you want a well made garment not covered in a giant logo/design, it's going to be more expensive.

I always assumed that, when it comes to logo covered clothing, you were getting a subsidized price in return for "repping" e.g. Nike.

Perhaps some brands do it that way, but usually in the luxury goods industry (and quite often in fast fashion like Nike) manufacturers will create "accessible" pieces designed specifically with brand poseurs who can't afford the premium products in the portfolio in mind, with a larger logo/unique design to emphasise the acquisition of a brand's product.

I can't find the source online, but I remember reading in "The Luxury Strategy" [0] that the cars at the lower end of the Mercedes line-up had badges 2" larger than those on the premium cars (e.g. A vs S Class), and the LV on the lower end Vuitton bags was larger than the higher end ones - specifically so they could be seen more easily to heighten the ego of the owner.

[0] Kapferer: https://www.amazon.co.uk/Luxury-Strategy-Break-Marketing-Bra...

My hypothesis was always that all the simple, nice tie patterns are "taken" as symbols for various old boys' clubs (Universities et al), leaving only ugly designs "meaningless" enough for general use.

The same thing is true, IIRC, of Scottish tartans. All the nice plaid represents some clan or another.

Prices aren't determined solely on the supply side.

Patterns that people are willing to pay more for are more expensive because there is more money chasing them, not because they are more expensive to create.

That's probably a component of the right answer, but you'd think that the suppliers of the less valuable patterns would adjust quickly and emulate the more valuable ones.

Quite often they are the same suppliers, even if the branding is different; the reason they produce both is that the “better” patterns aren't universally preferred, they are just what is preferred by people with more money to spend, and the other patterns are preferred to people with less money to spend. And there is considerable money spent making sure that those differences exist and evolve over time; because it drives spending and market segmentation.

> Why are they not able to compete on style and fashion?

I am honestly curious if this is primarily a materials, vendor, distribution, design personnel or intellectual property bottleneck.

Prodesign (Denmark) and Modo (US+Japan) have stylish good-quality frames that retail for half the price of premium brands like mykita, ic berlin, lindberg. Unclear why they don't have many competitors.

Mykita founder split from ic berlin (screwless frames). If you look at their designs, there does seem to be IP/patent avoidance. Both are comparably priced. There are supposedly cheap clones available, maybe they can be found on Alibaba.

Edit: see https://news.ycombinator.com/item?id=15431180

Edit2: ic berlin patent (expired?): https://www.google.com/patents/US5418581

I love Prodesign, but yeah they're not exactly competing on price.

Also a big fan of Etnia Barcelona -- they're in a similar price bracket (as far as I know they're independent, but I'll admit to not having researched it)

I've purchased ~6-8 pairs of glasses from zenni, primary because I'm really happy that they don't gouge the heck out of me for lenses with high refraction indexes or various coatings.

That said, the frames are totally hit or miss, with some of them feeling like they aren't worth the $10-20 or whatever they cost. I find though, its no so much materials as attention to detail. The materials themselves withstand a beating. One of my favorite pairs _rattled_ when I got it because the little plastic nose pieces, and the little plastic piece that fit over the end of the arms was lose. Drop of glue in the ear pieces, and a softer nose piece and they are now my favorite glasses.

OTOH, I also owned a half dozen pairs of ray-bans before I switched to zenni, and probably 3/4 of them had finish problems within the first couple years. The coating on the plastic pieces started to disintegrate leaving a sticky residue on one pair, and three pairs with metal frames had the clear varnish like substance start to crack and peel from the metallic finish. Another started to discolor after a couple years. I guess at least rayban has perfected planned obsolescence...

Why do you see an ophthalmologist and not an optometrist?

i mean... maybe they got so good at marketing that they have succeeded in incepting the concept of "decently built frames for non hipsters" in your mind to be the stuff they produce?

thats kinda sorta the whole point of marketing a branded commodity product...

Even if so, the point of blinding is that it's not the brand per se, but the actual design. And unless they have intellectual property defending the design, there should be nothing keeping a competitor from copying it.

The problem may be the copying. If what the cheap brands do is copying the expensive brands while trying to subtly change it to avoid getting sued (trade dress/copyright/design patent), the changes are likely to make the design worse in some way.

They were expensive before. 1-2000% markup on frames, etc. was pretty common in the 90s.

Edit: Ok, here we go downvoter. From memory: I could get a Perry Ellis frame out of the Frames catalog for about $10. Sola would sell me bifocal CR-39 lenses for ~$3.50/pair. A bottle of dye to tint lenses was about $4.00 and would last a week. A bottle of UV solution was $12 and it too would last a week. We'd sell the Frames for $150, the lenses for $125 and $10 a pop for tint and UV. This was early 90's before Luxottica bought everyone. I know I was in the business and, well, stayed in the business even after they bought the company I worked for. I'm not defending Luxottica. I don't like them, but it paid for my education and I have a pension coming in 10 years or so. Anyway, it was expensive _before_ them. My point stands. The one hour shops all had more to do with the prices going up than Luxottica did at that time.

Standard economic theory would say that if there are egregious margins, new players would enter the market and competition would bring down the price. That appears to happen now and then and then Luxottica buys up the players, keeping the prices steady? Alternative explanation that keeps with the facts.

Yes this is all true, but the real reason glasses cost so much is because people buy vision, not glasses. And people value vision extremely high. I started a glasses company and when I'd tell people their $900 glasses cost the eye doctor less than $100, they would give me this blank stare like "so what? I can see."

I'm not sure about that. I value hydration more than vision (I could live blind, but not without water). But I wouldn't pay $900 for a bottle of water and say "so what?"

Yes you bring up a good point. A pair of glasses is quite different than a bottle of water.

Another monopoly that needs to be broken up...

Can you imagine Comcast owning most of the media production companies, all of college/professional sports broadcast rights, internet access for home/business, AND forcing you to rent all personal computers you can use at home?

This is exactly what's happening with the eyewear industry.

Why isn't anyone launching a competitor in this space. There should be lot of room for innovation with current tech to create a entire organization competing in everything Luxottica does and may be more.

Clearly because of this monopoly there is no innovation from within industry except for designs. There is no substantial feature development around glasses, lenses or frames, again Silicon Valley has to step in and do innovation by combining two different industries.

Seems like this problem will never get solved.

Governments seem to be just surrendering to Corporate all over the world. Clearly Corporate have more buying power and they take care of themselves and not the general public. So there is no entity to take care of general public's interest.

A friend told me about this monopoly while I was admiring his Hawkers sunglasses, a spanish startup. Prices are 15-40€.

https://en.wikipedia.org/wiki/Hawkers_(company)

"In 2014 the company's revenue exceeded 15 million euros,increasing to 40 millions the following year, and in 2016 Hawkers projected 70 million euros in sales."

I'm pretty sure that if you look long/hard enough, you'll find creative Glass designers in your area.

Here is one in some remote place in a small third-world country: https://www.facebook.com/vakay.eyewear/

Their eyewear is not cheap but it works out the same as Luxottica after you add import tariffs.

Edit: It is important to mention that it is handmade.

Reply on news.ycombinator.com