For many, they’re a basic necessity, but eyeglasses are expensive.
Designer frames can cost upward of $400, while standard glasses from a company like Pearle Vision can start at around $80. In recent years, the eyewear startup Warby Parker has stepped into the picture, providing an affordable, attractive solution for shoppers, but glasses from Warby Parker still start at $95.
These prices, it turns out, are marked up. Way up.
This week, the Los Angeles Times spoke with two former executives of LensCrafters: Charles Dahan and E. Dean Butler, who founded LensCrafters in 1983. Both admitted that today, glasses are marked up nearly 1,000 percent.
“You can get amazingly good frames, with a Warby Parker level of quality, for $4 to $8,” said Butler. “For $15, you can get designer-quality frames, like what you’d get from Prada.”
Butler added that shoppers could get “absolutely first-quality lenses for $1.25 apiece.” When hearing that some glasses sell for $800 in the US, he laughed. “I know. It’s ridiculous. It’s a complete rip-off.”
Butler and Dahan confirmed what shoppers have already suspected: There’s price gouging in the optical industry. The main culprit? The eyewear giant EssilorLuxottica, which essentially controls the industry.
Luxottica is an Italian glasses company that was founded in 1961. Its most popular brands are Oakley and Ray-Ban, but over the years it’s gone through a spree of acquisitions, buying Sunglass Hut, Pearle Vision, and Cole National, which owns both Target and Sears Optical. Luxottica also owns the licensing on designer eyewear from Prada, Chanel, Coach, Versace, Michael Kors, Tory Burch, and more. If you buy glasses from a retail store in the US, the odds are pretty high that they were made by Luxottica.
Essilor is a French optical company that’s been around since the 1800s but has spent the past 20 years acquiring some 250 companies. In 2017, Essilor bought Luxottica for about $24 billion. Although it got approval by regulators in the US and the EU, and even passed an antitrust investigation by the Federal Trade Commission, business experts have called the merged EssilorLuxottica a monopoly. (Vox reached out to the company for comment and did not immediately hear back.)
Journalist Sam Knight wrote in the Guardian last year that “in seven centuries of spectacles, there has never been anything like it. The new entity will be worth around $50 billion, sell close to a billion pairs of lenses and frames every year, and have a workforce of more than 140,000 people.”
Reporting extensively on how both companies have their hands in every aspect of the eyewear industry, Knight wrote:
If Luxottica has spent the last quarter of a century buying up the most conspicuous elements of the optical business (the frames, the brands and the high-street chains), then Essilor has busied itself in the invisible parts, acquiring lens manufacturers, instrument makers, prescription labs (where glasses are put together) and the science of sight itself. The company holds more than 8,000 patents and funds university ophthalmology chairs around the world.
With such a grip on the industry, EssilorLuxottica essentially controls pricing. As one member of England’s Association of Optometrists told the BBC of the merger, “This now allows the group to control all aspects of supply of product — from manufacturer to the end user.”
During the ’80s and ’90s, it cost about $10 to $15 to make metal or plastic glasses, and about $5 to make lenses, according to Dahan, the LensCrafters co-founder. His company would price a product that cost about $20 to make at $99. Today, though, EssilorLuxottica marks its products up to several hundred dollars, because it can.
The company’s control hasn’t gone unnoticed. In 2017, former FTC policy director David Balto called on regulators in an op-ed to block the EssilorLuxottica merger, saying shoppers “need real competition to curb the sky-high prices of eyeglasses.” Industry experts have long said the company’s powers, even when they were separate entities, made for unfair results, for competing brands as well as shoppers’ wallets.
“That’s how they gained control of so many brands,” Dahan said. “If you don’t do what they want, they cut you off. Federal officials fell asleep at the wheel. They should never have allowed all these companies to roll into one. It destroyed competition.”
Some companies have been able to compete against EssilorLuxottica’s high prices, particularly online retailers. There’s ZenniOptical, a digital-only company that sells glasses for as low as $8. There’s also the company America’s Best, a giant glasses company that has more than 400 stores in the US.
Warby Parker, too, has been able to stand on its own pricing structure. It launched in 2010 and has become a millennial favorite for its try-on-at-home option and its colorful fleet of over 85 stores. Some have estimated that Warby Parker, which doesn’t release financial figures, earns about $340 million a year, compared to EssilorLuxottica’s annual $8.4 billion. But it still proves that a company can sell shoppers eyewear that doesn’t have a comically egregious markup.
Still, as the former LensCrafters executives revealed, many glasses really cost about $20 to make. This means even Warby Parker’s $95 frames could be seen as overpriced. Seems like eyeglasses will forever be a product we’re spending too much on.
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