Succession issue looms large at world's top glasses maker

Thu Feb 4, 2016 11:48am EST
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By Valentina Za and Silvia Aloisi

MILAN (Reuters) - For a man who created the world's leading eyewear company after growing up in a Milanese orphanage and learning metalwork in a tool shop, the issue of who to hand it on to should be relatively easy.

But Leonardo Del Vecchio's return to the helm of Italy's Luxottica, owner of Ray Ban and Oakley sunglasses, at the age of 80 and insistence none of his six children should carry the burden of such a big firm beg the question of who might fit the bill.

His renewed hands-on role follows the departure of his third CEO in 17 months and three sources close to the company say other managers have also left.

Positions are not being filled, two of the sources said, complicating Del Vecchio's avowed search for a second-line manager from within to step up to the plate.

The governance issues coincide with signs of fatigue in the company's main market, North America, and slowing growth in emerging markets. Del Vecchio has pledged to develop e-commerce, where the company lags, investment that could hit profitability.

Luxottica has ambitious growth plans and a reputation for top-notch managers. Most analysts recommend holding onto the stock or buying more, citing a leading position in an industry set to expand as image-conscious consumers age.

The share price has lost 9 percent since the announcement del Vecchio was formally back in charge but remains up 30 percent since the first of the trio of CEOs left.

One source said the departure of long-term boss Andrea Guerra in September 2014 had been followed by that of around a dozen first and second line managers, including the latest head of marketing.   Continued...

Some of the hundreds of sunglasses are seen on display at the annual ASR convention in San Diego in this September 9, 2005 file photo. REUTERS/Mike Blake/Files