The long read: How one giant company will dominate the way the whole world sees
If you have been wearing glasses for years, like me, it can be surprising to discover that you perceive the world thanks to a few giant companies that you have never heard of. Worrying about the fraying edge of motorway lights at night, or words that slide on the page, and occasionally spending a fortune at the opticians is, for many of us, enough to think about. And spectacles are unusual things. It is hard to think of another object in our society which is both a medical device that you dont want and a fashion accessory which you do.
Buying them, in my experience anyway, is a fraught, somewhat exciting exercise that starts in a darkened room, where you contemplate the blurred letters and the degeneration of your visual cortex, and ends in a bright, gallery-like space where you enjoy the spry feel of acetate in your fingers, listen to what you are told, pay more than you were expecting to, and look forward to inhabiting a new, slightly sharper version of your existing self.
The $100bn (74bn) eyewear industry is built on feelings such as this. In the trade, the choreography that takes you from the consulting room to the enticing, bare-brick display of 200 frames is known as romancing the product. The number of eye tests that turn into sales is the capture rate, which most opticians in Britain (or optometrists, as they are known in the rest of the world) set at around 60%. During the 20th century, the eyewear business worked hard to transform a physical deficiency into a statement of style. In the process, optical retailers learned the strange fact that for something that costs only a few pounds to make (even top-of-the-range frames and lenses cost, combined, no more than about 30 to produce), we are happy, happier in fact, when paying 10 or 20 times that amount. The margins, as one veteran of the sector told me carefully, are outrageous. The co-founder of Specsavers, Mary Perkins, is Britains first self-made female billionaire.
Almost everyone wears glasses at some point in their lives. In developed countries, the rule of thumb is that around 70% of adults need corrective lenses to see well. In Britain, that translates to some 35 million people. But its hardly a topic of national conversation. To the casual observer, the optical market also presents a busy and confusing sight. In Britain, thousands of independent opticians rub alongside a few big retail chains such as Specsavers, Vision Express and Boots. The wall displays in even a small, local optician hold several hundred frames, metal, acetate and rimless, while posters advertise a range of lenses with sciencey-sounding properties freeform, photo-fusion, reflex vision and names so bland they are hard to remember even when you are looking straight at them.
But what we see masks the underlying structure of the global eyewear business. Over the last generation, just two companies have risen above all the rest to dominate the industry. The lenses in my glasses and yours too, most likely are made by Essilor, a French multinational that controls almost half of the worlds prescription lens business and has acquired more than 250 other companies in the past 20 years.
There is a good chance, meanwhile, that your frames are made by Luxottica, an Italian company with an unparalleled combination of factories, designer labels and retail outlets. Luxottica pioneered the use of luxury brands in the optical business, and one of the many powerful functions of names such as Ray-Ban (which is owned by Luxottica) or Vogue (which is owned by Luxottica) or Prada (whose glasses are made by Luxottica) or Oliver Peoples (which is owned by Luxottica) or high-street outlets such as LensCrafters, the largest optical retailer in the US (which is owned by Luxottica), or John Lewis Opticians in the UK (which is run by Luxottica), or Sunglass Hut (which is owned by Luxottica) is to make the marketplace feel more varied than it actually is.
Between them, Essilor and Luxottica play a central, intimate role in the lives of a remarkable number of people. Around 1.4 billion of usrely on their products to drive to work, read on the beach, follow the whiteboard in biology lessons, type text messages to our grandchildren, land aircraft, watch old movies, write dissertations and glance across restaurants, hoping to look slightly more intelligent and interesting than we actually are. Last year, the two companies had a combined customer base that is somewhere between Apples and Facebooks, but with none of the hassle and scrutiny of being as well known.
Now they are becoming one. On 1 March, regulators in the EU and the US gave permission for the worlds largest optical companies to form a single corporation, which will be known as EssilorLuxottica. The new firm will not technically be a monopoly: Essilor currently has around 45% of the prescription lenses market, and Luxottica 25% of the frames. But in seven centuries of spectacles, there has never been anything like it. The new entity will be worth around $50bn (37bn), sell close to a billion pairs of lenses and frames every year, and have a workforce of more than 140,000 people. EssilorLuxottica intends to dominate what its executives call the visual experience for decades to come.
The creation of EssilorLuxottica is a big deal. It will have knock-on consequences for opticians and eyewear manufacturers from Hong Kong to Peru. But it is also a response to an unprecedented moment in the story of human vision namely, the accelerating degradation of our eyes. For several thousand years, human beings have lived in more or less advanced societies, reading, writing and doing business with one another, mostly without the aid of glasses. But that is coming to an end. No one is exactly sure what it is about early 21st-century urban living the time we spend indoors, the screens, the colour spectrum in LED lighting, or the needs of ageing populations but the net result is that across the world, we are becoming a species wearing lenses. The need varies depending where you go, because different populations have different genetic predispositions to poor eyesight, but it is there, and growing, and probably greater than you think. In Nigeria, around 90 million people, or half the population, are now thought to need corrective eyewear.
There are actually two things going on. The first is a largely unreported global epidemic of myopia, or shortsightedness, which has doubled among young people within a single generation. For a long time, scientists thought myopia was primarily determined by our genes. But about 10 years ago, it became clear that the way children were growing up was harming their eyesight, too. The effect is starkest in east Asia, where myopia has always been more common, but the rate of increase has been uniform, more or less, across the world. In the 1950s, between 10% and 20% of Chinese people were shortsighted. Now, among teenagers and young adults, the proportion is more like 90%. In Seoul, 95% of 19-year-old men are myopic, many of them severely, and at risk of blindness later in life.
At the same time, across the developing world, a slower and more complex process is underway, as populations age and urbanise and move indoors to work. The history of eyewear tells us that people do not, as a rule, start wearing glasses because they notice everything has gone a little out of focus. It is in order to take part in new forms of entertainment and labour. The mass market in spectacles did not emerge when they were invented, in 13th-century Italy, but 200 years later, alongside the printed word in Germany, because people wanted to read.
In 2018, an estimated 2.5 billion people, mostly in India, Africa and China, are thought to need spectacles, but have no means to have their eyes tested or to buy them. The visual divide, as NGOs call it, is one of those vast global shortcomings that suddenly makes sense when you think about it. Across the developing world, straightforward myopia and presbyopia, the medical name for longsightedness, have been linked with everything from high road deaths to low educational achievement and poor productivity in factories. Eye-health campaigners call it the largest untreated disability in the world.
It is also a staggering business opportunity. Essilor and Luxottica know this. It was Essilor that worked out and first publicised the 2.5 billion statistic, in 2012. For 2,000 years people were living mainly outside, said Hubert Sagnires, Essilors chairman and chief executive, when we met recently in Paris. Suddenly, we live inside, and we use this. He tapped his mobile phone on the table. The legal and technical details of the EssilorLuxottica merger will take a few years to iron out, but Sagnires was transparent about its mission: to equip the planet with eyewear over the coming decades. I am driving a very profitable company, Sagnires told me. You know, between 2020 and 2050, governments will not solve all the problems of the world.
The looming power of EssilorLuxottica is the subject of morbid obsession within the eyewear world. Everyone knows the new company is poised to have a profound impact on the way that we are going to see. Forgive me, said one longtime entrepreneur in the sector. But it is nothing short of control of the industry. One investor described the new corporation as a category killer. In many conversations, people described its arrival, which would have been genuinely unthinkable a generation ago, as both extraordinary and somehow inevitable at the same time. That struck me as the kind of contradiction you come across more often in a person than in a business. And it is true of EssilorLuxottica and, to some extent, the business of vision itself, because it is to an amazing degree the legacy of a single man.
Leonardo Del Vecchio is the patron, legend and haunting spirit of the global eyewear business. He is its Citizen Kane and its Captain Ahab. His father died before he was born; his mother was poor; and he was raised in an orphanage in wartime Milan, where he went out to work as a metal engraver at the age of 14. In 1961, Del Vecchio opened a workshop in the town of Agordo, in the Dolomite mountains. He was 25, and starting out on his own. The valley around Agordo was emptying out because of the closure of a mine, and the town was giving away land to companies that were willing to move there. Del Vecchio asked for 3,000 sq metres on the riverbank to build a factory to make parts for spectacles. He had a young family, and in time, he built a house next door to the workshop so he could step from one to the other, starting his day at 3am.
Over the next half century, Del Vecchio grew his company, which was called Luxottica, into the worlds greatest maker of glasses frames. In an industry that was traditionally fragmented and small-scale, the totality of Del Vecchios ambition took his rivals by surprise. He sought to control every element in the business, from the metal alloys of the hinges to the stores where eyewear is sold. Never assume that you have arrived, or look at the world as your only point of reference, he liked to say. In a series of audacious takeovers, Del Vecchio acquired brands such as Ray-Ban and Oakley and Persol, and signed contracts with fashion houses such as Armani, Ralph Lauren and Chanel. He built factories in China, acquired vision insurance schemes in the US and retail chains on four continents.
Since 1994, Del Vecchio has been Italys highest individual taxpayer and the countrys second-richest man. A few years ago, people thought his career had run its course. But in January 2017, at the age of 81, Del Vecchio announced the greatest deal of his life, in which he also secured the final missing part for his frames the lenses when Luxottica agreed to merge with Essilor. He wants to do this merger, a former colleague said, thinking he will leave behind this great company that will last for 100 years.
When I arrived in Agordo one recent afternoon, it was thinking about starting to snow. The town rests among steep wooded hills and the bare grey sides of mountains. The blue buildings of the Luxottica factory, with Del Vecchios house still standing by the entrance, glowed across the river. Although the plant is now merely one of the companys 12 frame manufacturing facilities, which stretch from So Paulo in Brazil to Dongguan in southern China, the founding in Agordo remains Luxotticas organising myth. Every year, Del Vecchio hosts a Christmas dinner for the plants 4,500 workers (the town of Agordo has a population of 4,000), which is entertained by an Italian pop star of his choosing. People are screaming and crying when he comes in, said Giorgio Striano, Luxotticas chief operating officer. In Agordo, Del Vecchio is referred to as simply, Il Presidente.