Getting visionary
Eyewear empire
Good morning, insightful analysts. This is your Stock Market Rundown for June 26th, 2024. Thanks for joining me once again. Let’s dig in:
TODAY’S TOP STORY: LUXURIOUS LENSES
Have you ever wondered why designer sunglasses are so expensive? After all, it’s about five bucks’ worth of plastic. So why does the cost jump to hundreds of dollars as soon as you slap a Gucci or Prada logo on the side?
Simple: a single company, EssilorLuxottica, has a near-monopoly on the global optical industry. The business was formed via the combination of two eyewear behemoths.
Italian company Luxottica owns top brands like Oakley and Ray-Ban, and has the licenses to make eyewear for luxury brands from Chanel to Versace. Meanwhile, French eyewear company Essilor controls other key parts of the optical supply chain, like lens manufacturers and prescription labs.
Since their merger in 2017, they’ve enjoy a chokehold on eyeglasses supply worldwide—and most likely manufactured the shades stashed in your glove compartment.
Last week, EssilorLuxottica made yet another acquisition: it bought streetwear brand Supreme for $1.5 billion. Founded in New York City in 1994, Supreme attracted a cult following via a strategy of collabs with brands from Louis Vuitton to Kermit the Frog.
At its peak, Supreme’s limited-edition releases “drops” had hypebeasts lining up overnight at its stores. Expect Supreme-branded eyewear to soon be on display on the shelves at your local mall—EssilorLuxottica also owns Sunglass Hut.
So what’s next for the sunglass supergiant? Potentially, a deal with Mark Zuckerberg. Meta, the parent company of Facebook, is in talks to acquire a stake in EssilorLuxottica.
This could lead to more products that fuse the expertise of both companies—like the “smart” Ray-Bans they launched in 2021 that let you do video calls through your sunglasses. Apparently, technology’s next frontier is sitting right on top of your nose.
SO WHAT ELSE IS GOING ON?
Private jet maker Textron beat expectations as consumer demand sent its profits soaring like a billionaire’s ego. Why fly commercial when you can buy your own sky limo?
If you want to make it in the mining industry, patience pays: a recent study found it takes an average of thirty years to open a new mine in the US. At least your grandkids will be collecting the dividends.
The parent company of Olive Garden is acquiring Tex-Mex restaurant chain Chuy’s. Guess they wanted to dip their unlimited breadsticks in Boom-Boom queso. Pass the Pepto-Bismol.
While most airlines quickly returned to normal after the major Windows systems outage late last week, Delta left thousands stranded for days, including many business travelers. This must be why I saw finance bros in Patagonia vests and Tumi backpacks hitchhiking on the interstate.
That’s it for this week, my friends; have yourselves a delightful weekend, and I’ll see you bright and early Monday morning. Yours in capitalism, The Axe
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