Recently, I came across another attractive company that fits into my eye care investment theme. I know it’s a tough environment in which to consider buying stocks right now, but you might consider putting this company on your radar screen.
Luxottica Group SpA (NYSE/LUX) is a large-cap, Italian company with a long-term track record of success, both financially and as a stock market investment.
The stock has done very well over the last couple of decades. In 1992, it split two-for-one; in 1998, it split five-for-one; and in 2000, it split two-for-one again. In my view, the stock is due for another split, as the company continues to grow.
You may not be familiar with Luxottica, but you’ve probably heard of some of its operating subsidiaries. Currently, the company operates nearly 5,500 optical retail stores mainly in North America and the Asia-Pacific region, selling premium, licensed eye glass brands. The company’s brands include “Ray- Ban,” “Vogue,” “Persol,” “Arnette,” and “REVO,” and it also licenses “Bvlgari,” “Chanel,” “Donna Karan,” “Prada,” and “Versace.”
The company’s retail distribution network is vast and successful. Luxottica owns and operates LensCrafters Inc., Sunglass Hut International Inc., and O.P.S.M. Group Limited. Overall, the company maintains a wholesale network that reaches some 120 countries, with a direct presence in 28 of the main eyewear markets worldwide. Most of the company’s eye care products are designed and manufactured at six manufacturing plants in Italy and one in China.
From my perspective, Luxottica is another well managed company that should be studied by business students in MBA programs. The company isn’t in the business of betting the farm on new strategies or big acquisitions, but it keeps its business plan simple and neat, builds quality eye products with licensed, brand name designs that consumers want, and controls the market by operating both the wholesale and retail ends of the business.
Steady and diligent growth is a great way to describe Luxottica’s business plan. As a long-term proposition, this company has a lot to offer investors.