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Meta in Talks to Buy Stake in Eyewear Giant EssilorLuxottica

The Facebook owner already has a partnership with the European company to make its Ray-Ban smart glasses

A display of EssilorLuxottica glasses. A next generation of Ray-Ban Meta glasses is planned for the 2025 holiday season. PHOTO: BENOIT TESSIER/REUTERS

A display of EssilorLuxottica glasses. A next generation of Ray-Ban Meta glasses is planned for the 2025 holiday season. PHOTO: BENOIT TESSIER/REUTERS

Facebook parent Meta Platforms META 3.00%increase; green up pointing triangle is in talks to acquire a stake of about 5% in eyewear company EssilorLuxottica EL 0.47%increase; green up pointing triangle, the company it partners with to make its Ray-Ban smart glasses, according to people familiar with the matter. 

The talks are continuing and may not result in a deal, the people said. 

Based on EssilorLuxottica’s recent market value, a roughly 5% stake could be valued at around 4.5 billion euros, or just under $5 billion. The investment would be relatively small for Meta, given its market value of around $1.2 trillion. 

Sales of the companies’ latest Ray-Ban smart glasses, called Ray-Ban Meta, have exceeded expectations. The devices, an important part of Meta’s hardware strategy, allow users to take photos and listen to music with the frames of their glasses, among other features. 

By acquiring a stake in Paris-based EssilorLuxottica, Meta is aiming to build on the momentum of the Ray-Ban Meta’s success and build more devices together, the people said. 

Maintaining ties with Luxottica is crucial for the success of smart glasses devices and the company’s ambitions to build the so-called metaverse, which is a term used to describe people interacting in a 3-D version of the internet simultaneously. 

A third-generation of the Ray-Ban Meta glasses is expected to be ready for consumers in time for the 2025 holiday-shopping season, people familiar with the matter said. That device is expected to include a small screen display. 

 

Meta CEO Mark Zuckerberg, shown in 2023, said in April that the Ray-Ban Meta glasses were doing well. PHOTO: CARLOS BARRIA/REUTERS
Meta CEO Mark Zuckerberg, shown in 2023, said in April that the Ray-Ban Meta glasses were doing well. PHOTO: CARLOS BARRIA/REUTERS

The allure of Luxottica’s Ray-Ban brand is important to the success of a tech device that users are expected to wear on their faces, the people said. Additionally, Luxottica’s ownership of LensCrafters, the prescription-eyewear retailer, plays a key role in selling the Ray-Ban Meta to users who require prescription lenses. 

The two companies began working together several years ago for the release of the first generation Ray-Ban Stories smart glasses, which went on sale in 2021. At the time, the two companies had agreed to develop two devices, according to people familiar with the matter. 

The Financial Times earlier reported Meta was discussing taking a small stake in EssilorLuxottica.

The initial device struggled to catch on with consumers, and among the glasses that were sold, only 10% of the Ray-Ban Stories were actively used by their purchasers, according to an internal company document viewed by The Wall Street Journal. 

The second-generation Ray-Ban Meta glasses went on sale in September and have done significantly better than their predecessors.The Ray-Ban Meta glasses operate more quickly and have better cameras than their predecessor. The Ray-Ban Meta also includes nascent generative AI technology that allows users to ask the device for information about the things in front of them, such as the breed of a cat

The Ray-Ban Meta glasses have proven popular for users who want to shoot hands-free videos of their children playing and first-person videos of themselves while doing things like going on roller coasters or riding bikes. 

Meta hasn’t said how well the Ray-Ban Meta glasses have sold, but Chief Executive Mark Zuckerberg in April said that device was doing well and that a market for that type of device was developing sooner than he would have expected. 

Meta sells its own devices to employees at a discount, and offers the Ray-Ban Meta glasses at a 15% discount with a limit of three pairs per employee, according to people familiar with the matter. The new glasses have proven so popular internally that some employees have tried to get extra pairs from their colleagues after hitting the three-pair limit.

Meanwhile, EssilorLuxottica on Wednesday announced two deals of its own: a $1.5 billion deal for the Supreme brand from Vans parent VF Corp.andVFC -0.74%decrease; red down pointing triangle an 80% stake in Germany’s Heidelberg Engineering.

 

 

Write to Salvador Rodriguez at salvador.rodriguez@wsj.com and Lauren Thomas at lauren.thomas@wsj.com

Appeared in the July 19, 2024, print edition as 'Meta in Talks to Acquire a Stake In Eyewear Giant EssilorLuxottica'.

Author: Editors Desk, Salvador Rodriguez, Lauren Thomas

Source: WSJ:

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