LensCrafters 2006 Annual Report Download - page 19

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STRATEGY |19 <
WHOLESALE
BRAND PORTFOLIO
With the signing of license agreements with Burberry, Polo Ralph Lauren and Tiffany & Co. and the
scheduled expiration of other agreements, Luxottica Group’s work on optimizing its brand portfolio
is nearing completion. By combining excellent, constantly available pre- and post-sale services, the
Group strives to satisfy customer expectations and market demands in the best manner possible.
House brands
Ray-Ban continues to be one of the great strengths of Luxottica Group’s brand portfolio, given its
excellent growth potential in both established and emerging markets. At the start of 2007, the Group
launched Never Hide, a new strategic platform and a global advertising campaign for Ray-Ban to
support new growth objectives for what is already the most-recognized eyewear brand in the world.
Other key house brands are: Persol, a brand with a rich history that is performing very well; Vogue,
abrand that underwent significant development in 2005; Arnette and Revo.
Licensed brands
Luxottica Group will continue to look for brands that are strong in strategically important markets or
brands that cover segments of the market that would enhance the present portfolio. In the
meantime, the Group’s focus will be to achieve maximum growth with new brands and within
existing brands that have significant growth potential.
DISTRIBUTION
The Group sees further potential both in markets where it already operates and in new markets. An
area of focus will be emerging markets, which produced very good results in 2005 and 2006.
Growth rates and margins are expected to remain higher in emerging markets than in developed
markets.
MANUFACTURING
Luxottica Group will continue to stand for «Made in Italy» eyewear, thanks to the quality and style of
its products, which are among the most coveted and recognizable in the premium segment. It will
continue to invest in new technology, production systems and research and development in order
to maintain the high value-added advantages of its products.
The Group’s growth in the retail segment in North America, especially in terms of volume in the
licensed brand segment and the new license agreements entered into during the last two years, is
increasing demand. To meet this demand, Luxottica 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. At its facilities in China, the Group manufactures
products that do not require the degree of value-added craftsmanship achieved by «Made in Italy»
manufacturing. As a result, this will add greater manufacturing flexibility in Italy for producing the
more sophisticated, complex designs that are increasingly in demand in Luxottica Group’s
wholesale and retail markets.