Kering wants to take over the eyewear industry

In an industry where immense profits are subject to changing public tastes and the evolving perception of brands, eyewear remains a highly profitable sector, with major players constantly vying for a share of the market. The sector is dominated by licenses, as well as historic companies that own the largest portion of the market, and in recent years both Kering and LVMH have established their own eyewear companies, Kering Eyewear and Thelios, to reclaim a portion of that enormous business volume - but this doesn't stop the hunger for acquisitions. According to a recent report by Financial Times, Kering and EssilorLuxottica are among the potential buyers eyeing Marcolin, a historic company that was discussed last year in the context of Esteè Lauder's acquisition of Tom Ford.

Marcolin, headquartered in the eyewear manufacturing district of Longarone in Veneto, has attracted interest from various quarters, including rival Safilo, as well as the aforementioned Kering and EssilorLuxottica. The company, which secured a perpetual licensing agreement with Tom Ford last year, boasts agreements with other prestigious brands such as Pucci, Zegna, Max&Co, and recently, Christian Louboutin. The allure of Marcolin lies not only in its prestigious brand partnerships, but also in its financial performance. Despite a selling price of €1.3 billion, Marcolin's revenue reached €421.6 million in the first nine months of 2023, with adjusted core profit rising to €64.6 million. Its perpetual licensing agreement with Tom Ford adds to its appeal, making it an attractive proposition for potential buyers. However, the high valuation set by Marcolin's principal shareholder, PAI Partners, has posed a challenge for all players looking to get their hands on the company.

Although Kering, with its growing eyewear division, and EssilorLuxottica, the world's largest eyewear manufacturer, have expressed interest, they remain cautious about overspending: an acquisition of this magnitude, capable of rewriting, at least in part, the power dynamics of the sector, could also attract scrutiny from the law and financial authorities becoming an extremely complicated process. However, it could be worth it: Kering's recent success with the opening of its own eyewear division suggests a strategic interest in expanding its presence in the eyewear market. In 2023, Kering Eyewear's revenue reached €1.5 billion, with operating income increasing to €276 million, indicating a solid foundation for further investments in the eyewear sector.