LensCrafters 2010 Annual Report Download - page 25

|23 >DISTRIBUTION
Luxottica operates in all the world’s major eyewear markets and continues to expand in emerging markets, where it has
made substantial investments in the last few years and intends to expand and strengthen its distribution platform.
Direct distribution makes it possible to maintain close contact with clients and maximize the image and visibility of Luxottica
brands. Further, the Group’s experience in direct operation of stores in certain of its more important countries, has given
it a unique understanding of the world’s eyewear markets. All this makes it possible, among other things, to achieve tight
control and strategic optimization of brand diffusion, both house and license.
Luxottica’s distribution structure is one of the Group’s main strengths. It is global, embracing retail stores and serving a
wholesale distribution network of third party stores and chains.
WHOLESALE DISTRIBUTION
The wholesale distribution structure covers more than 130 countries, with over 40 directly controlled or majority owned
operations in the major markets and approximately 100 independent distributors in other markets. Each wholesale subsidiary
operates its own network of sales representatives who are normally retained on a commission basis. Relationships with
large international, national and regional accounts are generally managed by employees.
Customers of the wholesale business are mostly retailers of mid to premium-priced eyewear, such as independent
opticians, optical retail chains, specialty sun retailers, department stores and duty-free shops. In North America and other
areas, the main customers also include independent optometrists, ophthalmologists and premium department stores.
Certain brands, including Oakley, are distributed also to sporting goods stores and specialty sports stores, including bike,
surf, snow, skate, golf and motor sports stores.
In addition to offering some of the best brands, with a broad array of models tailored to the needs of each market,
Luxottica also seeks to provide its wholesale customers with pre and post-sale services to enhance their business. These
services are designed to provide customers with the best products and in a time frame and manner that best serve the
Group’s customers’ needs.
Nearly a decade ago, Luxottica introduced STARS (Superior Turn Automatic Replenishment System). This business unit,
which is a part of the Wholesale division, provides third party customers with an enhanced partnership service. Developed
in 2002, originally under the name “Retail Service”, STARS offers management by Luxottica of the product selection
activities, production and assortment planning and automatic replenishment of its products in the store: all of these
activities were previously managed directly by the third party customer.
STARS provides the stores with a higher level of service, exploiting the knowledge of local markets and brands in order to
present a fresh and high-turnover product, and utilizing systems, tools and state-of-the-art planning techniques to ensure
an optimal inventory level at the point of sale.
When the project started in 2002, STARS managed 4 stores, growing to 100 by 2004 and maintaining a progressive
growth until reaching the mark of 1,000 points of sale by the end of 2009. By the end of 2010, STARS served a total of
approximately 1,500 stores in the major European markets, Latin America and Emerging Markets.
DISTRIBUTION