LensCrafters 2014 Annual Report Download - page 19

are as intelligent and functional as they are beautiful.
Luxottica’s eyewear professionals and Google’s high-
tech developers are devoted to designing, developing
and distributing a new breed of eyewear for Google
Glass and the multi-year R&D collaboration between
Luxottica and Intel is aimed at fusing premium, luxury
and sports eyewear with smart technology.
Market expansion
Luxottica is committed to maintaining and strengthening
its leading position in the markets in which it operates.
It also focuses on evaluating opportunities to further
penetrate emerging markets, a key driver of its long-
term growth strategy. Luxottica aims at increasing its
market expansion through stronger retail distribution
while consolidating its wholesale network and further
growing its presence in e-commerce, department stores
and travel retail.
Financial discipline
Luxottica has delivered solid sales growth, while
maintaining a strong focus on operating profitability,
return on investment and cash flow generation in
order to provide a solid basis for future profitable and
sustainable growth. The Company closely monitors
working capital management and continuously focuses
on debt optimization to help further strengthen its
financial position, accomplish its key objectives, and
ultimately improve the rate of return for shareholders.
Luxotticans
Highly qualified, motivated and committed employees
are critical to the long-term success of the Company.
Luxottica carefully manages the hiring and training
process with the goal of recruiting and retaining the
industry’s top talents. It also designs thorough succession
plans to ensure effective development and continuity.
Eyewear industry secular
growth drivers
The eyewear industry is a structurally growing market.
It is estimated to grow by approximately 30% over the
next five years, from today’s sales of approximately 900
million frames to approximately 1.2 billion, driven by
the demand in both emerging markets and developed
markets.
There are three main structural drivers behind this
expected growth, which are described below.
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By 2020 there will be an additional 500 million vision
correction wearers, bringing the total to approximately
2.2 billion people worldwide. According to current
industry estimates, this is due, in part, to a growing
and aging population and behavioral changes such as
increased TV, PC, tablet and smartphone exposure.
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There is still a significant gap between the number
of people that need vision correction (approximately
60% of global population) and the number of people
that get vision correction (approximately 25% of
global population). This presents an opportunity to
further evolve eyewear to meet growing consumer
needs and to elevate the category across all markets
and channels.
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Eyewear has been gradually evolving from a medical
device into a fashion accessory, making it a lifestyle
purchase and an extension of one’s own style and
identity. This shift is expected to translate into a
change in consumer behaviour, including a shorter
replacement cycle as well as driving multiple eyewear
purchases. Moreover, while premium eyewear is still
the smallest category within luxury accessories, it’s
one of the fastest growing, giving it high potential
in the coming years. Eyewear is also becoming an
important player in growing categories such as travel
retail and department stores, where sunglasses are
steadily moving from seasonal to permanent displays.
Premiumization is an increasingly important driver in
emerging markets, as they are benefiting from GDP
growth, rising upper middle class disposable income
and increased consumer awareness of fashion and
luxury brands.
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