In its continued attempts to make the nerdy Glass cool, Google GOOG -0.02% has partnered with Italian eyewear powerhouse Luxottica to design “innovative iconic wearable devices.” The world’s largest producer of sunglasses has pledged to include its marquee brands, Ray-Ban and Oakley, and expects to have its Glass collection hit the market in 2015. The biggest winner out of this whole ordeal, at least in the short-term, was Luxottica’s founder Leonardo Del Vecchio, whose fortune jumped more than $700 million on Tuesday to $19.8 billion in the aftermath of the announcement as shares in his sunglass empire surged.
No matter what one thinks of Google Glass, wearable technology is here to stay. And that means that fashion will gradually trump functionality as geeky devices are put through the designer’s laboratory. That’s why Google’s strategic partnership with Luxottica is a big deal, and why the Italian sunglass maker saw its shares jump more than 4% on Tuesday.
Luxottica and Google will put together a team to “design, develop and distribute a new breed of eyewear for Glass,” which Luxottica CEO Andrea Guerra expects to see in stores in 2015, according to Italian daily Corriere della Sera. Currently, Glass, which costs more than $1,500, is only available to select few through Google’s Explorer Program; the tech giant didn’t give any additional information as to when it plans a broader retail release of its geeky shades.
Whatever comes out of the partnership, Luxottica has a lot to gain. Google admitted that “given Luxottica’s rich history in manufacturing, we anticipate that they will have a significant role in the manufacturing of Glass-related frames.” Luxottica, which is headquartered in Milan and trades both in Italy and the U.S., controls a huge chunk of the global eyewear market through its own brands, and licensing agreements with the likes of Prada , Chanel , Dolce & Gabbana, Coach COH -0.58%, and others. According to a profile of the company by Forbes’ Halah Touryalai, Luxottica produced 75 million glasses in 2012, which it sold through its network of over 7,000 retail stores and through third-parties. Revenues grew from $7.2 billion (€5.2 billion) in 2009 to over $10.2 billion (€7.3 billion) last year.
Del Vecchio, who grew up poor and was sent to an orphanage at age 7 after his father passed away, derives the bulk of his nearly $20 billion fortune from Luxottica, which he founded in 1961. He controls 61.35% of Luxottica through holding company Delfin, which also holds stakes in real estate investment firm Fonciere des Regions and Italian insurer Assicurazioni Generali. Billionaire fashion designer Giorgio Armani also owns a 4.77% stake in Luxottica.
Despite what appear to be obvious benefits of wearable technology, Google Glass has received its fair share of criticism. From being called a constant surveillance device to aiding in dehumanizing and isolating individuals, Glass’ detractors have even coined the term “Glasshole” to show their discontent. Del Vecchio, though, probably doesn’t care too much about the haters. Glassholes or not, the new partnership has now made him $700 million richer. And that could be just the beginning.
Photo by Max Braun
Article by Agustino Fontevecchia: http://www.forbes.com/sites/afontevecchia/2014/03/25/google-glass-ray-bans-partnership-with-luxottica-makes-founder-del-vecchio-700m-richer/