LensCrafters 2005 Annual Report Download - page 54

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STRATEGY | 53 <
WHOLESALE
BRAND PORTFOLIO
With the signing of the agreement with Polo Ralph Lauren and the scheduled expiry of other agreements
at the end of 2006, Luxottica Group sees its work on optimizing its brand portfolio as nearing
completion. By combining excellent, constantly available pre- and post-sale services, the Group is able
to satisfy customer expectations and market demands in the best possible way.
House Brands
With the launch of the Ray-Ban Ophthalmic and Ray-Ban Junior lines, the Group proved that it is
possible to strengthen even an extremely well-known brand, in fact the best-selling sunglass brand in
the world, and to create new opportunities immediately attractive to the market. Luxottica Group intends
to similarly develop other key house brands which show potential for further growth, such as Vogue (on
which much work was done in 2005), Arnette, Persol and Revo.
License Brands
Luxottica Group will continue to look for brands that are strong in markets strategically important for the Group,
or brands that cover segments of the market where the present portfolio shows margin for improvement.
DISTRIBUTION
Notwithstanding its presence in 130 countries, in 38 of which through a direct presence, Luxottica Group
sees further potential both in markets where it already has a presence and in new markets. In 2005, the
Group took initial steps to expand its wholesale distribution in Eastern Europe, Russia and China. Major
resources will be allocated to leveraging opportunities for further growth in emerging markets for eyewear.
MANUFACTURING
Luxottica Group will continue to stand for Made in Italy in eyewear, thanks to the quality and style of its
product, so recognizable and sought after in the premium segment in which it is leader. It will therefore
continue to invest in new technology, production systems and research and development to maintain
the high value added levels of its products and service.
Luxottica Group’s growth in the retail segment in North America, especially in terms of volumes in the
licensed brand segment, and in Asia-Pacific and the new licensing agreements entered in recent years
are increasing the demand that the Group must be able to meet. To this end, the Group intends to
maximize the manufacturing and logistical advantage of being the only premium eyewear manufacturer in
the world with a wholly-owned manufacturing capability in China, where it can make products not requiring
the degree of value added achieved by Made in Italy manufacturing. This, in turn, will provide greater
manufacturing flexibility at the Group’s Italian plants for producing the more sophisticated, complex
designs increasingly in demand in the wholesale and retail segments served by Luxottica Group.