NB: Sadly, Leonardo del Vecchio died on the 27th of June 2022. He will be remembered as one of the greatest entrepreneurs of all time. This is his biography (written at the end of 2021, when he was still alive).
Leonardo del Vecchio is the founder, executive chairman, and former CEO of Luxottica, the biggest world manufacturer and retailer of eyeglasses, sunglasses, and eyewear.
His fortune stands as we speak at a staggering $33 billion, which makes him the second richest man in Italy.
Born in a poor family, he began working at 14 until he founded Luxottica 11 years later, at 25 years old, subsequently making it the giant it is today.
Here’s the story of Leonardo Del Vecchio.
Childhood
Del Vecchio was born in Milan in 1935, the youngest of a poor family. He had four elder brothers.
His dad died shortly after he was born.
At seven years old, his family was so poor that Leonardo was entrusted to a catholic orphanage.
He began working at 14 years old in a steel factory, making cups and medals to help support his family.
That enabled him to save some money and encouraged by the factory owner, he enrolled in an evening design course at 19.
Three years later, he moved to another city to work in a metal engraving factory.
It was at that time that he became passionate about glasses.
At 25 years old, in 1958, he moved to Agordo which was the center of the Italian eyewear industry, to open an eyeglass frame shop.
His customers liked his products as they were of high quality.
In 1961, Leonardo created the company Luxottica. “Luxottica” was a combination of the words “luce”, meaning light, and “ottica”, meaning optics. He had 14 employees already, and specialized in making small metal parts for glasses.
Business was good, but it wasn’t enough for Del Vecchio. In 1967, he stopped making glasses parts and decided to assemble them from start to finish. He sold them to other companies and that’s how he started subcontracting.
He was so successful that four years later, he decided to sell glasses under the brand Luxottica on top of manufacturing for third parties.
Since he was now a B2C company, he attended a trade fair in Milan. He signed so many orders that he decided to stop manufacturing for others and to focus exclusively on Luxottica.
While Luxottica was doing great, Del Vecchio was unsatisfied. His position as a manufacturer-only did not enable him to get as close to his customers as he wanted to.
So he fixed this problem.
In 1974, Del Vecchio bought the retail chain Carrone to increase the vertical integration of Luxottica.
For the first time, Luxottica could control from start to finish the manufacturing, distribution, and sales of glasses.
But it wasn’t enough.
In 1981, he adventured himself out of Italy and set up a subsidiary in Germany.
Leonardo would never stop growing Luxottica from then on.
Growing
In 1981, Del Vecchio bought Avant-Garde, a US eyewear distributor, with a loan from an Italian bank. That same year, he opened four factories in the US and hired 4 500 people.
One year later, he had repaid his loan.
His manufacturing and R&D centers enabled him to pioneer new technologies, designs, and increase the quality of the glasses.
In 1985, Del Vecchio gave up his CEO seat to Roberto Chemello and became chairman to better focus on the growth of Luxottica instead of the daily operations.
That enabled him to notice a shift in the way customers used glasses.
While in the past, glasses were a medical device, they were becoming a fashion accessory.
Leonardo decided not to wait for the transition to complete and jumped into the fashion industry.
In 1988, Luxottica got a licensing deal with Armani.
Luxottica would manufacture, distribute and sell glasses under the Armani brand against a fee paid to Armani.
In 1990, Del Vecchio listed Luxottica on the New York Stock Exchange, which enabled him to go on a shopping spree the following decade.
His first purchase was the Italian brand Vogue.
In 1992, Luxottica signed another licensing deal with Brooks Brothers.
In 1995, Del Vecchio bought Persol, one of his direct competitors in Italy, and US Shoe Corporation, the owner of LensCrafters, North America’s largest optical chain.
That enabled Luxottica to become the largest producer and distributor of eyewear in the world, a place it still occupies to this day.
In 1997, they signed a licensing deal with Bulgari and entered the Chinese market with a Japanese partner.
In 1999, Luxottica bought Ray-Ban and signed a licensing deal with Chanel.
In 2000, Del Vecchio listed Luxottica on the Italian stock exchange in Milan, which enabled him to acquire retail chains to distribute his brands.
In 2001, they bought Sunglass Hut.
In 2002, their R&D efforts led to the creation of STAR, a supply chain and communication software platform for retail companies.
Then Luxottica bought Australian retail chain OPSM in 2003. That same year, they signed a licensing deal with Prada
In 2004, they bought Pearle Vision and Cole National and signed another deal with DKNY.
Del Vecchio took a step back from the leadership of Luxottica in 2004. His long-time CEO Roberto Chemello stepped down and was replaced by Andrea Guerra.
Still Growing
Now that he had a bit more time, Del Vecchio sought to diversify his investments.
He bought a majority stake into Beni Stabili, a real estate group, and entered an alliance with Foncière des Régions (today called Covivio), a French real estate group, to create the biggest real estate group in Europe.
During that time, he made sure that Luxottica kept on growing.
In 2005 Sunglass Hut began to expand into fast-growing foreign markets like the Middle East, South Africa, India, South-East Asia, Mexico, Brazil, and China,
Meanwhile, Luxottica bought Surfeyes in 2006 and signed with Dolce&Gabbana and Burberry.
In 2007, Luxottica bought US-based Oakley, a sports eyewear brand, for $ 2.1 billion in a hostile takeover. That same year, they signed yet another licensing deal with Ralph Lauren.
Then they signed with Tiffany in 2008, Tory Burch in 2009, and Coach in 2012.
In 2011, they bought Erroca, an Israelian eyeglass brand, for €20 million. In 2013, they bought Alain Mikli International.
And in 2014, they helped Google create the Google Glasses and bought glasses.com.
One year later, they signed a licensing deal with Michael Kors, then with Valentino in 2017.
Changes
In 2014, Andrea Guerra stepped down from his role as CEO and the structure of the company changed. It was decided there would be two CEOs to manage the in and out of the company.
However, it didn’t work out very well. After scrambling for two years, Del Vecchio decided to emerge out of his semi-retirement to come back as an executive chairman.
One year later, in 2017, Luxottica merged with Essilor, one of the biggest lenses companies in the world.
The new entity, called Essilor Luxottica, was estimated to be worth around €57 billion at the time of the deal.
Luxottica was simultaneously delisted from the NYSE due to the main share trading activity happening on the Italian stock exchange.
In 2018, Luxottica acquired a majority stake in Fukui Megane, a Japanese manufacturer of luxury frames.
Finally, in 2019, Luxottica delisted its shares from the Milan stock exchange as the merger with Essilor was completed.
What Now
At 86 years old, Del Vecchio still plays an active role in his company.
He has no plan to retire, which leaves many questions regarding the future of Luxottica unanswered.
While other billionaire founders like Richard Branson and Reinhold Wuerth got their children invested in their company, not even one of Del Vecchio’s six children has any managerial role in the company.
Luxottica is a classic mega-business tale.
Founders refused to list on the stock exchange, practiced vertical integration as much as they could, went on a buying spree of other companies to grow fast, invested enormous resources into R&D, and took good care of their staff.
In 2015, Del Vecchio gave shares worth nine million euros to 8000 Italian employees. Luxottica was also one of the first companies in the world to enable their employees to fix their working hours how it best suited them.
Even though Luxottica is today an eyeglass, lense, and eyewear monopoly, they are not planning on stopping growth just yet.
In their rapport of 2020, Del Vecchio and his co-chairman Hubert Sagnieres identified wearable and artificial intelligence as vectors for growth for the upcoming years.
This precisely, seems to be the secret of all of these mega-successful companies.
They never have enough. They don’t stop working, buying, developing, selling, and growing.
And this is why they succeed.
Sources
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