Luxottica Group adapts to economic environment

Key Points

Milan-Luxottica Group is carrying out a number of cost-cutting measures, including store closings, manufacturing reductions, and cuts in advertising. These changes came after the company's net income in 2008 fell to 395 million, down 17.6%.

One hundred seventeen stores in North America will close, 56 additional Pearle Vision locations will be franchised by the end of the year, and 110 retail units are under review, according to Andrea Guerra, chief executive officer, Luxottica. Overall, a 2% to 3% reduction in its global store count is planned, according to the company.

Its eyewear manufacturing volume will be reduced by 15%, three low-performing brands will be eliminated, and its number of frame styles will be reduced.

"We have already implemented a series of measures that will enable us to adapt rapidly and flexibly to the new environment, and that will both contribute to boosting sales and streamline our cost structure across all divisions and geographic regions," Guerra said. He added that Luxottica is "rapidly adapting our manufacturing, distribution and sales capacity to the new needs of the market."

The company also is revising the merchandise mix of its Sunglass Hut stores in North America, within Luxottica Retail, by putting more emphasis on the popular retail selling points between $50 and $150.