Luxottica buys Brazilian fashion eyewear business

Italian fashion eyewear conglomerate Luxottica Group has bought Brazilian eyewear company Grupo Tecnol capital. Luxottica, which licenses brands such as Prada, Ralph Lauren, and Tom Ford, aims to strengthen its presence in Brazil, a country

with significant growth potential. Utilizing Tecnol's platform will allow Luxottica to increase service levels to customers and its presence in the Brazilian market. Tecnol currently has a portfolio comprising both house and licensed brands, strong wholesale distribution activities, an optical retail chain of 90 stores and a central, leading-edge laboratory.

"This operation perfectly fits into our long-term growth strategy," commented Andrea Guerra, Chief Executive Officer of Luxottica. "Brazil is one of the countries where Luxottica aims at being as "domestic" as it is in Italy, where it was established 50 years ago, having deep local roots and investing in people, activities and culture.

Brazil, and more generally Latin America, represents a key region for Luxottica's future development. Currently, Brazil is one of the top ten countries for Luxottica's Wholesale Division, notwithstanding its focus to date solely on the "luxury" segment, with an average price per unit higher than in Europe.

With a population of approximately 200 million people, Brazil is in fact one of the most dynamic and fast-growing countries in the world with strong GDP growth rates and a strengthening of its middle class.

Established in 1972, Grupo Tecnol is today the main integrated player in the eyewear market in Brazil. In 2010, it posted net sales of approximately 90 million Euros, with a Compound Average Growth Rate over the last three years of approximately 14%.

The acquisition is expected to close by the beginning of 2012. Under the terms of the purchase agreement, Luxottica will initially acquire 80% of Grupo Tecnol capital with the remaining 20% purchased over the next 4 years. The enterprise value of Tecnol is approximately 110 million Euros.

Image: MiuMiu eyewear