Here's a video quick 101 on Luxottica. Here's a Forbes article if you don't feel like watching the video.
Essilor is a renowed lens crafter, Luxottica owns a ton of major frame companies, now the two will combine after Essilor agreed to buy Luxottica for $24 bil in stock. Luxottica will be delisted and the new company will be known as EssilorLuxottica.
Market dominance after merger:
"Bloomberg News"Luxottica increasingly competes with large luxury players such as Kering in a global eyewear industry worth about $121 billion last year, according to data from Euromonitor.
$121 billion... Time to work for EssilorLuxottica instead of JPM Chase?
Reference:
Essilor to Buy Ray-Ban Maker Luxottica for About $24 Billion
I'm disturbed at how much consolidation is occurring in a wide array of industries. It's the consequence of cheap money.
I actually think this is the beginning of the end for this pseudo-monopoly, and this is a first act of quiet desperation. Warby Parker is the first big player that is challenging the monopoly, but many others will rise eventually. Right now we're the equivalent of 2011 and Warby Parker is Netflix. The cable companies sensed the beginning of the end but didn't have any way of stopping it really; now they're hemorrhaging 500,000 subscribers per month in the U.S. alone.
Except in rare instances with certain staple commodities (electricity, water), monopoly cannot last forever. People will not pay $350 for glasses forever when they have otherwise acceptable replacements. My Warby Parker glasses look so good that I think women like me better in them than out of them. $100 for the pair.
That's the way disruption works in the Clay Christensen sense: the new player (The "Disruptor") comes in with a crappier product at a substantially lower cost, and starts by serving customers who currently do not consume a product or consume very little of it because their needs are over-served by these expensive feature-intensive, super high quality products when they would be happy to use a simpler, lower quality product at a discount to the current price. Eventually, these companies (like Warby Parker) will gain scale, and move up in terms of technological and quality (still at a lower cost structure), which will allow them to then compete with the incumbent.
An entrant that has the capability to deliver 80% of the customer value proposition at 50% of the price can be very dangerous.