Fifteen years after buying sunglass chain Erroca from Anthony Corre for $1 million, Michael Wolf and his nephew Yosef Wolf, are selling the stores to the international Luxottica Group for €20 million. The deal was signed on Friday.
The main shareholder is Michael Wolf (90%). The chain had 19 stores when Wolf bought it in 1996. Today it has 63 wholly-owned stores.
The chain's turnover is NIS 120 million a year, and the chain's private Erroca brand is responsible for 35% of the chain's sales.
This is the first time an international player will operate a retail sunglasses chain in Israel. Luxottica intends to replace the Erroca brand, and to rename the chain "Sunglass Hut", the name under which the international chain operates:. Meanwhile, sales of the private Erroca brand will apparently end.
"I do not know what their policy will be later on, but they have a large number of possibilities. This is a powerful company," Michael Wolf told "Globes".
Sunglass Hut is the largest retailer in the world specializing in sunglasses, with more than 2,000 stores in the US, Canada, the Caribbean, Europe, Australia, and other countries.
The new chain will benefit from international corporation Luxottica's strength, whose house brands include Ray-Ban, Oakley, Vogue, Persol, Oliver Peoples, Arnette and REVO. Luxottica also sells licensed brands such as Bvlgari, Burberry, Chanel, Dolce & Gabbana, Donna Karan, Polo Ralph Lauren, Prada, Tiffany and Versace.
Concern in the sector
"The acquisition is strategically important to Luxottica, since it allows us to establish a retail presence in Israel. We believe that we will be able to strengthen our brand presence in Israel, and to stimulate the entire quality sunglass category," said Luxottica Group's Executive Vice President, Sun & Luxury Retail Fabio d'Angelantonio.
Luxottica Executive Vice President, Wholesale of Luxottica Paolo Alberti requested to send a calming message to other local chains, saying, "Luxottica's strong commitment to its wholesale customers and to excellent service will not change."
Published by Globes [online], Israel business news - www.globes-online.com - on August 7, 2011
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