Kering is launching a strategic initiative aimed at building in-house eyewear expertise, in order to take advantage of strong growth in global sales of frames and sunglasses.
The French company, whose portfolio includes 11 luxury and sport & lifestyle brands such as Gucci, Balenciaga and Alexander McQueen, will invest in the Kering Eyewear division. Roberto Vedovotto will be CEO. Vedovotto and his team will be co-shareholders of the new entity.
Roberto Vedovotto, former CEO at Safilo, was taken on at Kering in November 2013. At the same time as it introduced its new business model, Kering also announced a new agreement with Safilo, which holds a license for Kering–s Gucci frames. The two companies will terminate the current Gucci license agreement two years early, by December 31, 2016, for a compensation payment to Safilo of nearly $130 million.
Instead, Safilo and Kering will set up a strategic product partnership agreement for four years, starting in January 2017. This agreement will cover product development, manufacturing and supply of Gucci frames and will allow Kering to benefit from Safilo–s expertise and production capabilities.
Eventually, Kering plans to fully control the eyewear value chain, from design to product development and supply chain, and from branding to sales.
The 11 Kering brands, nine of which are managed through license agreements with five different partners, currently generate $500 million in sales and over $70 million in royalties.
