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How badly are we being ripped off on eyewear? Former industry execs tell all

 
MAR 05, 2019 | 5:00 AM
  
 
How badly are we being ripped off on eyewear? Former industry execs tell all
Charles Dahan was one of the leading suppliers of frames to LensCrafters, before the company was purchased by optical behemoth Luxottica. Glasses that cost him $20 to make would be sold for five times that amount. (Luxottica)
 

Charles Dahan knows from firsthand experience how badly people get ripped off when buying eyeglasses.

He was once one of the leading suppliers of frames to LensCrafters, before the company was purchased by optical behemoth Luxottica. He also built machines that improved the lens-manufacturing process.

 
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In other words, Dahan, 70, knows the eyewear business from start to finish. And he doesn’t like what’s happened.

“There is no competition in the industry, not anymore,” he told me. “Luxottica bought everyone. They set whatever prices they please.”

 

Dahan, who lives in Potomac, Md., was responding to a column I recently wrote about why consumer prices for frames and lenses are so astronomically high, with markups often approaching 1,000%.

I noted that if you wear designer glasses, there’s a very good chance you’re wearing Luxottica frames.

The company’s owned and licensed brands include Armani, Brooks Brothers, Burberry, Chanel, Coach, DKNY, Dolce & Gabbana, Michael Kors, Oakley, Oliver Peoples, Persol, Polo Ralph Lauren, Ray-Ban, Tiffany, Valentino, Vogue and Versace.

Along with LensCrafters, Luxottica also runs Pearle Vision, Sears Optical, Sunglass Hut and Target Optical, as well as the insurer EyeMed Vision Care.

And Italy’s Luxottica now casts an even longer shadow over the eyewear industry after merging last fall with France’s Essilor, the world’s leading maker of prescription eyeglass lenses and contact lenses. The combined entity is called EssilorLuxottica.

Just so you know up front, I reached out to both Luxottica and its parent company with what Dahan told me. I asked if they’d like to respond to his specific points or to speak generally about optical pricing.

Neither company responded, which was the same response I received the last time I contacted them.

Apparently EssilorLuxottica feels no need to defend its business practices. Or it understands that no reasonable defense is possible.

Dahan, a chemical engineer by training, established a company called Custom Optical in 1977 after designing a machine capable of making prescription lenses appear thinner.

In short order he also was designing plastic and metal frames, and proposed to LensCrafters in 1985 that he supply the then-independent company.

“They bought my lens machines, and soon I was selling them a few models of frames,” Dahan said. “Those were successful, so they kept buying more.”

Eventually, he said, his company was supplying LensCrafters with about 20% of its frames. “They called me their crown jewel,” Dahan said.

E. Dean Butler, the founder of LensCrafters, remembers Dahan as “a real go-getter.”

“He was a key supplier — good product at reasonable prices,” Butler, 74, said in a phone interview from Berlin, where he was meeting with optical-industry contacts.

He’s no longer affiliated with LensCrafters. These days he’s based in England, but serves as a consultant to optical businesses worldwide.

Both Butler and Dahan acknowledged what most consumers have long suspected: that the prices we pay for eyewear in no way reflect the actual cost of making frames and lenses.

When he was in the business, in the 1980s and ’90s, Dahan said it cost him between $10 and $16 to manufacture a pair of quality plastic or metal frames.

Lenses, he said, might cost about $5 a pair to produce. With fancy coatings, that could boost the price all the way to $15.

He said LensCrafters would turn around and charge $99 for completed glasses that cost $20 or $30 to make — and this was well below what many independent opticians charged. Nowadays, he said, those same glasses at LensCrafters might cost hundreds of dollars.

Butler said he recently visited factories in China where many glasses for the U.S. market are manufactured. Improved technology has made prices even lower than what Dahan recalled.

“You can get amazingly good frames, with a Warby Parker level of quality, for $4 to $8,” Butler said. “For $15, you can get designer-quality frames, like what you’d get from Prada.”

And lenses? “You can buy absolutely first-quality lenses for $1.25 apiece,” Butler said.

Yet those same frames and lenses might sell in the United States for $800.

Butler laughed. “I know,” he said. “It’s ridiculous. It’s a complete rip-off.”

In 1995, Luxottica purchased LensCrafters’ parent company, U.S. Shoe Corp., for $1.4 billion. The goal wasn’t to get into the shoe business. It was to take control of LensCrafters’ hundreds of stores nationwide.

Dahan said things went downhill for him after that. Luxottica increasingly emphasized its own frames over those of outside suppliers, he said, and Custom Optical’s sales plunged. Dahan was forced to close his business in 2001.

“It wasn’t just me,” he said. “It happened to a lot of companies. Look at Oakley.”

Indeed, the California maker of premium sunglasses was embraced by skiers and other outdoorsy types after it released its first sunglasses in 1984.

It raised $230 million with an initial public offering of stock in 1995. Its biggest customer by far was Sunglass Hut, which, like LensCrafters, had stores in malls across the country.

Luxottica purchased Sunglass Hut in early 2001. It promptly told Oakley it wanted to pay significantly lower wholesale prices or it would reduce its orders and push its own brands instead.

Within months, Oakley acknowledged to shareholders that the talks hadn’t gone well and that Luxottica was slashing its orders.

“We have made every reasonable effort to establish a mutually beneficial business partnership with Luxottica, but it is clear from this week's surprising actions that our efforts have been ignored,” Oakley’s management said in a statement at the time.

The company’s stock immediately lost more than a third of its value.

Luxottica acquired Oakley a few years later, adding it to Ray-Ban, which Luxottica obtained in 1999.

“That’s how they gained control of so many brands,” Dahan said. “If you don’t do what they want, they cut you off.”

Again, no one at Luxottica responded to my request for comment.

As I’ve previously observed, online glasses sales hold potential for pushing retail eyewear prices lower, but the e-glasses industry still has a ways to go before posing a threat to the likes of EssilorLuxottica.

It can be a challenge buying something so central to one’s appearance without first trying it on or receiving hands-on help with fitting.

In the meantime, Dahan and Butler told me, federal authorities should step up and prevent price gouging for eyewear — just as they’ve done with other healthcare products, such as EpiPens.

“Federal officials fell asleep at the wheel,” Dahan said. “They should never have allowed all these companies to roll into one. It destroyed competition.”

Butler said it should be clear from EssilorLuxottica’s practices that the company has too much market power. “If that’s not a monopoly,” he said, “I don’t know what is.”

I couldn’t agree more. Regulators are currently wringing their hands over further consolidation in the wireless industry, with a proposed merger between Sprint and T-Mobile raising the prospect of just three major carriers.

The eyewear market is in considerably worse shape.

That should be clear to anyone.

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$400 for Oakley stabdard prescription with some alleged scratch protection and supposedly lighter lenses. With vision insurance  

 

They look at me when I pay out like I am stealing/ getting one helliva deal. 

 

I’m not feeling it...

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They should consolidate while they can.  Another industry absolutely ripe for a technological Enema.  Your optometrist marks them up to pay their staff.  Your mall store marks them up because they signed an idiotic lease.  Your luxury boutique that sells them alongside purses and scarves marks them up to look like part of the high life.  

Meanwhile, if you can order 5 pairs to your home and keep one and send the rest back and not have to fuck with the mall and salespeople...you will.  

The only retail sunglasses left in 5 years will be the ones at gas stations for impulse buys because your hangover hurts and you need to drive back from Waco.  

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31 minutes ago, ImissWallyPryor said:

I like the frames on my WalMart readers better than my designer frames. I might ask WalMart if they can order Nikon lenses to fit those frames.

I’m becoming my father. 

On that note, Sam's Club is cheaper without insurance than buying at the other places with insurance.  Luxxxxxx musta not own them yet.

 

Edited by zork
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1 hour ago, Lobo said:

They should consolidate while they can.  Another industry absolutely ripe for a technological Enema.  Your optometrist marks them up to pay their staff.  Your mall store marks them up because they signed an idiotic lease.  Your luxury boutique that sells them alongside purses and scarves marks them up to look like part of the high life.  

Meanwhile, if you can order 5 pairs to your home and keep one and send the rest back and not have to fuck with the mall and salespeople...you will.  

The only retail sunglasses left in 5 years will be the ones at gas stations for impulse buys because your hangover hurts and you need to drive back from Waco.  

This is correct and why it's not an antitrust issue. 

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42 minutes ago, luke duke said:

Makes my decision to get LASIK back in 2005 look pretty good.

I was thinking the same thing. I got mine done in 1999 and I know the procedure is much more reasonable now than it was then. Seems like it would be a pretty viable option for a lot of people.

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No argument on the cost but if you have a complicated prescription (-9 and astigmatism) then mail order is probably a crapshoot. I use progressive lenses since I need reading correction and those with a high index lens are the highest prices. I may try to get a mail order pair someday but have no idea where they will put the transition points without me sittting there. On the other hand I buy cheap readers on line for wearing with contacts

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1 hour ago, Dbeasy said:

Zenni Optical. Greatness.

Yup.  Not sure if anyone's supposed to be surprised by this article.  eCommerce bringing consumers closer to Chinese manufacturing has lifted the veil off most of this stuff.

 

Before LASIK, almost a decade ago, I was getting my stuff from Zenni.  You could get multiple pairs (hence offsetting the 'risk' of not trying them on) with upgraded lenses, to have separate pairs in the car, in the office, in the travel bag, etc......all for a sum less than post-insurance out-of-pocket payment for Big Box Opti glasses.

 

Of course, some people are still slaves to the Brick & Mortar model.  Wife splashed on some Prada whatever nonsense RX glasses for half a grand.  Has a better logo and nicer carrying case.

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1 hour ago, RPM said:

I got Lasik about 10 years ago for $2500. I would have easily spent more than that on a new glasses in that time. 

Same here, but I've gotten to the point where I'm going to need it again.  I've had to start wearing contacts/glasses again to see clearly, although it isn't nearly as bad as it was before lasik (20/200 lol).  

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10 minutes ago, CooterBrown said:

Timely article is timely. I dropped $1k on glasses two years ago and have been dreading getting new ones. I think I’ll give that $39 place a try. It’s barely any money lost if they don’t work out.

You should get them in Cedar Park. They are a lot cheaper when you buy them where the poors live.

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1 hour ago, Fondren & Main said:

My Chinese Ray Ban’s are better than the real things and only cost 10 bucks on Amazon.

Yeah, I seem to be incapable of keeping a pair of sunglasses for more than a year. I used to scavenge the gas stations or academy for whatever I could find when I needed a pair, now I just order a couple pairs off of Amazon when I need them. crazy selection for less than $15. 

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I've been buying my frames on Ebay or at antique stores for years. Contacts are not an option due to the fact that a speck of dust feels like a boulder. Most of mine are 12k filled. Ful-Vue is widely available,  B&L somewhat less. I go get the check up, get the scrip, and leave. Fuck any and all frames made after 1960. 

I've got a few places that are competent at making lenses. This thread has inspired me to shop further.

I read a similar article a few weeks ago. It cemented my ongoing plan of giving the middle finger to corporations bent on extortion. 

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4 hours ago, Dbeasy said:

Zenni Optical. Greatness.

Beat me to it.

Been buying my glasses there for years.  You choose your frames.  You choose what options you want on your glasses.  You can get customizable stuff like your name engraved on them or w/e if you're in to that sort of thing.  If you know your prescription (which you should), you don't even need an optometrist's go-ahead.  Just plug and play your blindness stats and off you go.

Just bought a new pair this past week.  Total cost?  $34.  Free shipping. 

 

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4 hours ago, AUinHsv said:

No argument on the cost but if you have a complicated prescription (-9 and astigmatism) then mail order is probably a crapshoot. I use progressive lenses since I need reading correction and those with a high index lens are the highest prices. I may try to get a mail order pair someday but have no idea where they will put the transition points without me sittting there. On the other hand I buy cheap readers on line for wearing with contacts

Agreed.  My situation is extremely rare, so much so that UofH Optometry school used my prescription in a nationwide paper.  But once I have the prescription and know the brands that can handle the curvature of my Rx...the fuck do I give where they come from as long as they look okay and are cheap?  

Optometry has long benefited from the fact that were really the only medical profession with a massive retail component.  So they went and lobbied that the prescription was easily obtained and portable so they could buy glasses in the next market.  Optometrists lost customers in this way but gained them because as one client left, another came to them from another place.  They think they can't be replaced, but the dispensary will be easily replaced because once people that the information, they'll skip over the markup and limited selection in exchange for unlimited options and very tight margins with the ability to "test drive" multiple frames for days or weeks on end.  Then they come back with, "yeah, but our optical staff can really help you with selection and comfort."  They're one degree above the fucking asshole at the car dealership who says, "without my expertise, the customer may not know their after-market options and financing alternatives."  How long are we gonna keep this illusion up?  

Here's the best part---your eye exams will continue to increase in price because the retail component of your D.O. is making less money on the retail dispensary.  So even though you're being a frugal consumer and finding frames elsewhere, you're still gonna have to eat shit because you have to subsidize the practice that can't attract retail customers.  Your loyalty will only fuck you in the end.  

But oh yeah, wait.  The customer service.  Why buy eyeglasses from home and try them out in real life when you can have the shitty clinician help you out?  Because only certain frames will facilitate your prescription?  Right, right.  And those frames just so only happen to be at your optometry shop, and not online according to them.  

I think there's a name for that type of business practice.  

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So, in my town, "Stanton Optical" came in and remodeled an old citibank branch.  Nice, fancy place.

One of my tenants took her daughter there for an exam.  They asked her to sign a form, saying that there isn't actually a DO on site.  They fucking facetime you with a DO. 

She correctly walked out.   Fucking walmart has a DO in the office. 

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So I'll relate an interesting personal experience here, since it seems germane. I bought several pair of these sunglasses: https://www.bing.com/search?q=Gregory+peck+sunglasses&PC=U316&FORM=CHROMN

Except I bought them here: https://www.dhgate.com/wholesale/search.do?act=search&sus=&searchkey=+Gregory+Peck+sunglasses&catalog=#pusearch1812

Also I got the surgery so I don't need the glasses anymore. I did the cost benefit, plus I get ALL the chics now, it's amazing.

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I’m sort of in the business so I’ll offer my perspective...

Some of you are surprised that brand name frames cost a lot and that Luxottica significantly marks up their products. What rock have you been living under? This has been going on for decades, not just in eyewear, but throughout the fashion industry. Yes, you are paying for a style and brand, just like every clothing choice you make. This particular item sits on your face for everyone to see when they look at you, unlike that brand name sweater that gets worn 5-10 times a year. Maybe it’s worth the markup, maybe not, depends on the person.

Regarding the actual quality of the optics, you often get what you pay for. If you have a simple prescription, especially if you are not yet to the point of needing bifocals, then you can probably use Warby Parker or other online retailers without a noticeable difference. If you have a complex prescription or say you want a progressive bifocal or you simply have a strange face, then it’s a bit of a crapshoot. When you order online, no one is checking your PD, checking the position of the optical centers, checking the bifocal height and position, checking for prism when needed, looking at the nosepieces and temples for correct fit, etc. You type in your prescription and you get what they send you. When you buy through a local optical shop, especially one with a certified optician, you are getting a higher level of service from someone who actually cares about your glasses being correct for you.

Next thing which should be obvious but for some reason isn’t — not all lenses are created the same. If you have a DSLR camera, do you use Nikon or Canon lenses or a knock off lens you found on Amazon? What are professional photographers using? Why would you expect your eyeglasses be any different?

Also, if you are buying glasses for your young child, please please please buy from a reputable source. Children are susceptible to amblyopia (lazy eye) when glasses are not correct. This causes permanent limitation of vision beyond a certain age. You are better off getting the cheapest possible frame from your local optician than you are ordering upgrades from an online source. Your child will thank you when they become an adult with good vision.

Your glasses are your way of seeing the world and they are a major part of the physical appearance you project to other people. You don’t need to unnecessarily overpay for this, but hardly a place you want sacrifice quality in the name of cost. It would be better to get a good pair and keep them 3-4 years than to switch out cheap pairs on an annual basis.

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12 minutes ago, wild_turkey said:

I’m sort of in the business so I’ll offer my perspective...

Some of you are surprised that brand name frames cost a lot and that Luxottica significantly marks up their products. What rock have you been living under? This has been going on for decades, not just in eyewear, but throughout the fashion industry. Yes, you are paying for a style and brand, just like every clothing choice you make. This particular item sits on your face for everyone to see when they look at you, unlike that brand name sweater that gets worn 5-10 times a year. Maybe it’s worth the markup, maybe not, depends on the person.

Regarding the actual quality of the optics, you often get what you pay for. If you have a simple prescription, especially if you are not yet to the point of needing bifocals, then you can probably use Warby Parker or other online retailers without a noticeable difference. If you have a complex prescription or say you want a progressive bifocal or you simply have a strange face, then it’s a bit of a crapshoot. When you order online, no one is checking your PD, checking the position of the optical centers, checking the bifocal height and position, checking for prism when needed, looking at the nosepieces and temples for correct fit, etc. You type in your prescription and you get what they send you. When you buy through a local optical shop, especially one with a certified optician, you are getting a higher level of service from someone who actually cares about your glasses being correct for you.

Next thing which should be obvious but for some reason isn’t — not all lenses are created the same. If you have a DSLR camera, do you use Nikon or Canon lenses or a knock off lens you found on Amazon? What are professional photographers using? Why would you expect your eyeglasses be any different?

Also, if you are buying glasses for your young child, please please please buy from a reputable source. Children are susceptible to amblyopia (lazy eye) when glasses are not correct. This causes permanent limitation of vision beyond a certain age. You are better off getting the cheapest possible frame from your local optician than you are ordering upgrades from an online source. Your child will thank you when they become an adult with good vision.

Your glasses are your way of seeing the world and they are a major part of the physical appearance you project to other people. You don’t need to unnecessarily overpay for this, but hardly a place you want sacrifice quality in the name of cost. It would be better to get a good pair and keep them 3-4 years than to switch out cheap pairs on an annual basis.

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38 minutes ago, wild_turkey said:

I’m sort of in the business so I’ll offer my perspective...

Some of you are surprised that brand name frames cost a lot and that Luxottica significantly marks up their products. What rock have you been living under? This has been going on for decades, not just in eyewear, but throughout the fashion industry. Yes, you are paying for a style and brand, just like every clothing choice you make. This particular item sits on your face for everyone to see when they look at you, unlike that brand name sweater that gets worn 5-10 times a year. Maybe it’s worth the markup, maybe not, depends on the person.

Regarding the actual quality of the optics, you often get what you pay for. If you have a simple prescription, especially if you are not yet to the point of needing bifocals, then you can probably use Warby Parker or other online retailers without a noticeable difference. If you have a complex prescription or say you want a progressive bifocal or you simply have a strange face, then it’s a bit of a crapshoot. When you order online, no one is checking your PD, checking the position of the optical centers, checking the bifocal height and position, checking for prism when needed, looking at the nosepieces and temples for correct fit, etc. You type in your prescription and you get what they send you. When you buy through a local optical shop, especially one with a certified optician, you are getting a higher level of service from someone who actually cares about your glasses being correct for you.

Next thing which should be obvious but for some reason isn’t — not all lenses are created the same. If you have a DSLR camera, do you use Nikon or Canon lenses or a knock off lens you found on Amazon? What are professional photographers using? Why would you expect your eyeglasses be any different?

Also, if you are buying glasses for your young child, please please please buy from a reputable source. Children are susceptible to amblyopia (lazy eye) when glasses are not correct. This causes permanent limitation of vision beyond a certain age. You are better off getting the cheapest possible frame from your local optician than you are ordering upgrades from an online source. Your child will thank you when they become an adult with good vision.

Your glasses are your way of seeing the world and they are a major part of the physical appearance you project to other people. You don’t need to unnecessarily overpay for this, but hardly a place you want sacrifice quality in the name of cost. It would be better to get a good pair and keep them 3-4 years than to switch out cheap pairs on an annual basis.

My daughter has a strong prescription, and she tried Warby Parker. The lenses had the Coke bottle bottom look, so we told her we’d pay for replacements, but only if the lenses were top-of the-line Nikon. She spent $200-something at Sam’s or WalMart or whatever.

My wife had Dr. Stephen Dell do her Lazik in 2000, and her current Optometrist (a very good one) has told her several times that her results are the best she’s ever seen.  I’ve decided that if I ever get my eyes done, I’ll travel to Austin as long as Stephen Dell is still in the business. 

Edited by ImissWallyPryor
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40 minutes ago, wild_turkey said:

I’m sort of in the business so I’ll offer my perspective...

When you order online, no one is checking your PD, checking the position of the optical centers, checking the bifocal height and position, checking for prism when needed, looking at the nosepieces and temples for correct fit, etc. 

i know you do lasik procedures so thanks for your input.  

 

i want to say, the brick/mortar warby parker stores do all of the above services (except for bifocals).  

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5 minutes ago, ImissWallyPryor said:

My daughter has a strong prescription, and she tried Warby Parker. The lenses had the Coke bottle bottom look, so we told her we’d pay for replacements, but only if the lenses were top-of the-line Nikon. She spent $200-something at Sam’s or WalMart or whatever.

My wife had Dr. Stephen Dell do her Lazik in 2000, and her current Optometrist (a very good one) has told her several times that her results are the best she’s ever seen.  I’ve decided that if I ever get my eyes done, I’ll travel to Austin as long as Stephen Dell is still in the business. 

what does that even mean?  by what criteria is he/she judging that? 

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