Luxottica is dismissing 400 employees at Oakley's headquarters at Foothill Ranch, California, as part of its plans to integrate the brand. From Oct. 1, the North American structure of the brand, including information technology, administration, sales and order management will be transferred to Luxottica, mainly to the wholesale unit in New York and its distribution center in Atlanta. Oakley employs around 2,200 people in the state of California.
Product development, manufacturing, marketing and sales will remain at Foothill Ranch. In connection with the reorganization, Colin Baden, the former chief executive of Oakley, will assume a new role as chief innovation and product officer, responsible for R&D, line planning and military contracts. He will report directly to Massimo Vian, joint CEO of the Luxottica group.
As part of the strategic overhaul, Luxottica has appointed Andrea Dorigo president of Oakley's sport division, reporting to the other chief executive of the group, Adil Mehboob-Khan. Dorigo already worked for the Luxottica group from 2005 to 2014, occupying various positions and becoming president of wholesale for North America. He left the company to run the North American business of Brooks Brothers, a U.S. menswear retailer owned and managed by Claudio Del Vecchio, son of Luxottica's main shareholder and chairman, Leonardo Del Vecchio
Over the past weeks, the group has eliminated senior positions at Oakley from the chief executive to heads of the sales channels and product development. On July 1, Oakley's European headquarters in Zurich were closed with the staff transferred to Milan and Belluno in Italy and London.
Luxottica will book €50 million in charges for the integration of Oakley. Out of these extraordinary items, €20 million have been booked in the second quarter and the remaining €30 million will be accounted for in the second half of 2015. Oakley's integration is expected to be completed by the year-end.
The company gave more details about the €100 million in annual synergies it expects from the reorganization of Oakley's operations. The integration at wholesale and targeted initiatives at retail and in apparel are expected to generate additional revenues that should yield an extra €50 million in operating income by 2017. The streamlining of the organization will provide additional annual cost savings of €50 million from 2016. Luxottica said that all the savings will be reinvested in Oakley.