Luxottica reports the departure of one of its 7 board members, David Browne, who actually represented LensCrafters, the group's large US optical chain. Browne will also quit its operational functions, including responsibility for the group's commercial operations.
No clear explanation could be obtained for Browne's resignation. Luxottica chief Leonardo Del Vecchio and Browne reportedly parted by mutual consent. Nevertheless, observers feel that the move may be related to a growing centralization strategy, described by Del Vecchio as an integration process, which tends to reduce independent decision-making within the controlled companies, including a giant like LensCrafters. A public statement in fact declares that retailing operations will now be placed under the direct control of the group's 4-man executive board. Cliff Bartow, chief operating officer of LenCrafters, and Jack Dennis, its chief financial officer, will report to it directly.
Meanwhile, Luxottica's results for the 9 months ended Sept. 30 show a major jump in its revenues of 17.4 percent to nearly 2.7 trillion lire (1.4bn), due in part to the acquisition of Ray-Ban and other former Bausch & Lomb operations, which on the other caused the group's gross margin to decline. The net margin dropped from 8.7 to 7.8 percent.
The Ray-Ban effect was felt only in the 3rd quarter, where Luxottica's net profit dropped from 57.3 to 51.1 billion lire (e26.4m). The takeover cost 1,200 billion lire (e620m), without assumption of debt, yet the group managed to reduce net debt by $47 million to $1,167.7 million in 3-month period.