FOOTHILL RANCH, Calif. & MILAN, Italy, Dec 12, 2001 (BUSINESS WIRE) — Oakley Inc. (NYSE:OO) and Luxottica Group S.p.A (NYSE:LUX) (MTA:LUX) today jointly announced a new three-year commercial agreement for the distribution of Oakley products through Luxottica's Sunglass Hut International retail stores.
The agreement, effective immediately, applies to Sunglass Hut International locations in the United States, Canada, the United Kingdom and Ireland, and marks the resumption of the business relationship between the two companies, which had been substantially reduced since Aug. 2, 2001.
Oakley and Luxottica also expect to resume their business together on mutually agreed terms for the markets not specifically covered by this new agreement.
"This agreement recognizes the unique, mutually beneficial nature of our association with Sunglass Hut International, the largest sunglass specialty retailer in the world," commented Oakley's Chief Executive Officer Jim Jannard.
"And while we may still have our differences, by renewing our relationship with Luxottica, consumers who prefer to shop at sunglass specialty stores will once again have access to a full selection of Oakley eyewear at Sunglass Hut International."
Leonardo Del Vecchio commented: "We are pleased to have reached this agreement and believe that the high-quality image of the Oakley brand remains unaltered even as Oakley continued to pursue alternative distribution channels."
Under the agreement, Luxottica can obtain preferred pricing terms if it purchases certain minimum quantities from Oakley by Dec. 31, 2002, and in each of the two subsequent years ending Dec. 31, 2003, and 2004, or if Sunglass Hut International shows that Oakley's products accounted for at least 15 percent of the chain's total retail sales in U.S. dollars during each year of the agreement.
Luxottica noted its objective to maintain Oakley sales above this level.
Jannard added, "Due to Oakley's vertically integrated manufacturing processes, these additional sales will help to maximize Oakley's operating efficiencies and, as a result, the company has revised its financial guidance for 2002 in a separate release issued today."
While this new agreement is clearly important to our sunglass business, we will continue to pursue our initiatives to diversify our distribution, including our Oakley Premium Dealer program, with retailers that carry not only our sunglass line but also our footwear, apparel, prescription eyewear and watch product lines."
The agreement is effective through Dec. 31, 2004. The agreement has no bearing on pending intellectual property litigation between the two companies and their affiliates.