The New Vision: Eyewear's Growing Role and Perpetual Licenses in the Luxury Fashion Sector

The eyewear segment is fast becoming a pivotal accessory category within the luxury industry, with major brands increasingly bringing this segment in-house to better control brand representation and quality. A standout example of this evolving strategy is Safilo Group's recent announcement of a perpetual license agreement with Authentic Brands Group for 'Eyewear by David Beckham'. This bold move replaces their expiring contract and signals a growing trend: the shift towards perpetual licensing.

Perpetual licensing agreements like Safilo's with David Beckham, Marcolin's with Tom Ford, and EssilorLuxottica's with Eastman Kodak are not just business maneuvers but strategic, visionary commitments to brand development. These agreements ensure long-term stability and are seen as investments in the future viability of the brands. They allow companies to secure significant assets, reduce the risks associated with license renewals, and plan extensive, future-oriented projects. This is crucial in a market where the past few years have seen dramatic changes, such as the merger of Essilor and Luxottica and the rise of Kering Eyewear and Thélios, pushing competitors to reevaluate their strategies.

Financially, the impact of these strategies is evident. Last year, Safilo, Italy’s second-largest eyewear manufacturer, reported sales totaling 1.02 billion euros, a slight decrease from 1.08 billion euros in 2022. This follows significant industry shifts, including Kering's decision in 2014 to internalize eyewear production for major brands like Gucci, impacting Safilo's operations.

Kering Eyewear, now a decade old, reported a significant milestone with 1.5 billion euros in sales last year.

Similarly, Thélios, initially a venture between LVMH Mo?t Hennessy Louis Vuitton and Marcolin, has now taken over former licenses such as Dior and Fendi.

EssilorLuxottica, the industry giant, reported a staggering 24.5 billion euros in consolidated revenues in 2022. Its extensive portfolio includes proprietary brands such as Ray-Ban, Oakley, and Persol, as well as licensed brands like Michael Kors, Armani, and Chanel. This diversity underscores the company's robust position in the eyewear market, leveraging its innovative capabilities and extensive distribution network.

Industry analysts recognize the strategic value of such moves. They point out that while larger, established brands may exit these licensing agreements, smaller or emerging brands are entering them, highlighting a dynamic shift in the sector's landscape. This evolution is partially a response to the luxury industry's ongoing trend of in-housing licenses, aiming to consolidate and extend control over how brands are portrayed and experienced worldwide.

In sum, the eyewear industry is adapting under these new norms, proving the importance of eyewear as a category. As the industry continues to evolve, the role of eyewear will undoubtedly expand, further embedding itself as a cornerstone of luxury fashion.