Oakley Inc. parent Luxottica Group SPA is rooting for its own at the Olympic Games in Rio de Janeiro this month, tallying medals won by Team Oakley.
The roster of athletes includes U.S. beach volleyball star Kerri Walsh, China’s badminton champ Lin Dan, cross-country mountain biker Julien Absalon from France and South Africa’s triathloner Richard Murray—all of whom are wearing Oakley’s new “Green Fade” performance sunglasses.
“What I like about the Olympics so much is that it unifies the entire world,” Walsh said in a recent post on Oakley’s blog. “And I really appreciate the fact that Oakley is picking up on that and they’re unifying the athletes. And with all of us wearing the Green Fade eyewear—it’s powerful.”
Olympic spirit aside, Luxottica invested about $40 million this year to upgrade and double its eyewear manufacturing operations in Foothill Ranch, where the new sunglasses are crafted.
“During this Olympic summer, we will measure Oakley success of course in sales, but also [it will depend] on how many medals our athletes will win, so for all of us and the team in Luxottica it is really a competition time,” Chief Executive Massimo Vian said during a July earnings call.
The designer, manufacturer and distributer of fashion, luxury, sport and performance eyewear, which posted $9.8 billion in revenue last year, is betting on Green Fade’s “ultra-light sports frames” and PRIZM lenses, which filter light to highlight colors athletes may need to better notice details in various environmental conditions. There’s the PRIZM Road model and the golf, field, trail, water, shooting and cricket versions, as well as one for daily use.
Oakley also is showcasing “Radar Pace” eyewear at the summer games, each equipped with a voice-activated coaching system developed in collaboration with Intel Corp. in Santa Clara. The product line is being introduced in a “softer launch for athletes” with less than 100 available products, Vian said.
“Our expectation is to increase curiosity and to create a lot of noise on social platforms.”
The mass launch of the new product is scheduled for October.
‘Packed’ R&D Pipeline
Colin Baden, who exited the chief executive’s post at Oakley last year and now consults for its innovation division, said that during his 20-year tenure at the company, he’s “never seen such proliferation of amazingly great ideas” headed for the marketplace.
“The R&D pipeline is packed,” he said. “I would expect really great stuff from Oakley in the coming years. It’s incredible what this group has done.”
Its manufacturing plant in Foothill Ranch has been reconfigured and modernized, he said, adding, “If Kent Lane, who used to run manufacturing here, came into the building—he would faint. It’s that radical of a change … It has huge injection molding areas, lens molding, lens processing, assembly, finishing, prescription-lens processing. It’s a pretty elaborate compound. Capital expansion alone in this building just for this year is north of $40 million.”
Green Fade’s frames are created by way of the injection molding process, where plastic resins are liquefied and injected into molds.
The PRIZM lenses also are manufactured in Foothill Ranch, as is the Radar Pace eyewear, which Baden dubbed as “the beginning of a long journey in [wearable technology] that I think we can have a huge impact in.”
The product, which uses Intel’s software, was designed at Luxottica’s research and development office in San Francisco, where Baden now spends most of his time.
“We are connected to every new amazing thought and idea that exists at the most innovative place on the planet,” he said, referring to the Silicon Valley, “and we are pretty excited about what we can glean from it.” He added that his team’s latest project is “helmet-goggle integration.”
“This year is the first year that we’ll be doing (ski) helmets,” Baden said. “Goggles always suffer from fogging, so we’ve come up with a way that the goggle and the helmet are built together. We have great anti-fog properties, so that starts this winter, and next spring we start with cycling helmets. It’s something everyone has wanted us to do, and when you think about the helmet—there is a lot of real estate to do cool stuff on, so we are pretty excited about that.”
Changes on Way
Oakley is hiring for about a dozen manufacturing-related positions in Foothill Ranch, although it recently announced plans to cut 417 positions by year-end, leaving it with a local employee base of about 1,400. Most of the eliminated positions are in customer service, marketing, apparel design, retail and sales operations.
The staff changes come as Luxottica speeds up Oakley’s integration into its operations—it took over the brand’s optical, or prescription, and fashion frames business in January, a division that posted “almost double digit” growth in the first half of the year. Now it plans to do the same with its “sports” offerings, which will become “part of the Luxottica wholesale family” and benefit from “the power that we can have in negotiations” as a part of a “larger family,” according to Paolo Alberti, Luxottica’s executive vice president of wholesale.
The wholesale division now will report to the parent company’s New York office, and operations of its 290 stores will be handled from Mason, Ohio.
Oakley’s “brand activities will be more and more coordinated by the Milan main office and also the apparel, footwear and accessories’ product offer will be simplified, will be more focused,” chief executive Vian said.
“You’ll be able to see an immediate effect on the Spring ’17 new collections.”
The restructuring didn’t go unnoticed by—and isn’t immune to some skepticism from—Oakley founder Jim Jannard, who sold the company to Luxottica in 2007 for $2.1 billion.
“Devastated,” he posted on his Facebook page. “LUX has officially dismantled everything it took decades to build. Shakes head. Rolls eyes. Deep depression. Building Oakley took inventions wrapped in art and an army of great people. It now has been reduced to a bottom line number. Sad day for me and everyone who invested their heart and soul in the ‘O’.”
