He was mainly why you pay so much for glasses

Leonardo Del Vecchio, chairman of eyewear behemoth EssilorLuxottica, has died aged 87, his business reported Monday.

“Leonardo Del Vecchio was a fantastic Italian,” European Economic climate Commissioner Paolo Gentiloni tweeted. “His story, from orphanage to leadership of a organization empire, appears to be like a story from yet another time.”

His tale, for far better or even worse, is also why you shell out so much for eyeglasses.

Via a sequence of mergers, acquisitions and shrewd licensing bargains, Del Vecchio turned EssilorLuxottica into an economic juggernaut that exercised in the vicinity of-monopoly control more than the world eyewear business.

As I described in a sequence of columns for the Los Angeles Periods, EssilorLuxottica possibly owns or controls almost each and every top eyewear brand name, together with Armani, Brooks Bros., Burberry, Chanel, Mentor, Oakley, Oliver Peoples, Polo and Ray-Ban.

The organization is also the premier maker and distributor of lenses, controlling foremost brands such as Varilux, Crizal, Eyezen, Foster Grant and Transitions.

But hold out, there is a lot more. EssilorLuxottica now owns or operates LensCrafters, Pearle Vision, Sunglass Hut, Focus on Optical, EyeBuyDirect and FramesDirect.

And since Paris-based EssilorLuxottica also owns the EyeMed eyesight approach, it has monumental influence over impartial optical retailers. Its achieve extends to almost every single factor of the eyewear current market.

I chatted previously this year with E. Dean Butler, the founder of LensCrafters, who now functions as an impartial business guide.

I advised him about my latest obtain of (EssilorLuxottica) frames and (EssilorLuxottica) lenses that mentioned for $822 but price me $445 with my (EssilorLuxottica) EyeMed low cost.

I questioned Butler how a lot it essentially value to manufacture individuals eyeglasses. He place the figure at “not far more than $25.”

Butler reported his estimate didn’t incorporate labor and other overhead costs. So let us double his $25 producing estimate. No, let us triple it.

With a manufacturing facility charge of $75, the retail markup for my eyeglasses was 996%. The markup with my vision system was 493%.

Del Vecchio was clearly an outstanding businessman. He turned bits of plastic into a multibillion-greenback empire.

But make no miscalculation: When a business is marking up price ranges by virtually 1,000% for healthcare, that is not capitalism.

It is cost gouging.