Luxottica to enter Israeli retail market through the acquisition of premier sunglass specialty chain with more than 60 stores
Milan, Italy, August 5, 2011 – Luxottica Group S.p.A. (MTA: LUX; NYSE: LUX), a global leader in the design, manufacturing, distribution and sale of fashion, luxury and sports eyewear, today announced that it has entered into an agreement pursuant to which it will acquire Erroca, the most important sunglass specialty retail chain in Israel, totaling more than 60 stores.
This transaction marks Luxottica’s entry into the sun retail business in Israel, a country with excellent growth potential and where the Group already has a solid presence through its wholesale division. Over time, the stores will be rebranded under the Sunglass Hut brand, the largest sunglass specialty retailer in the world.
“This acquisition is strategically important to Luxottica, as it allows us to establish a meaningful retail presence in Israel, a very dynamic and fast-growing market.” said Fabio d’Angelantonio, Luxottica Group’s Executive Vice President, Sun & Luxury Retail. “Erroca market positioning is well in line with Sunglass Hut brand heritage and values: we do believe that, thanks to this operation, we’ll be able to strengthen the presence of our brands in the Country and to stimulate the premium sunglasses category overall.” “Israel represents a very important market for Luxottica”, said Paolo Alberti, Executive Vice President, Wholesale of Luxottica.
“Luxottica’s strong commitment to its Wholesale clients and to excellence in service will stay the same and potentially improve given the positive benefits for the whole industry from this investment: by this action, Luxottica shows how strategic this Country is for the Group.” The entry in the Israeli market is part of Sunglass Hut global strategy of expanding in the so-called “sun belt”, which includes regions with high growth potential and a relevant number of sunny days per year. In 2011, in fact, Sunglass Hut already entered the Mexican, Brazilian and Chinese retail markets.
The enterprise value of this transaction, which is subject to the approval of the relevant competition authority and is expected to close by the end of October 2011, is approximately €20 million.
Erroca retail chain operates more than 60 sunglass retail locations in select shopping malls in most key Israeli cities, including Jerusalem, Tel Aviv and Eilat. It is expected that net sales of the chain for 2011 could reach €25 million.