By Sean O'Brien

February 29, 2000

On Monday, October 11, 36 employees of Arnette Optic Illusions were let go in an anticipated move to further integrate Arnette’s operations with those of its new owner, Luxottica Group S.p.A. (NYSE: BOL).

According to Arnette Director Of Marketing Gary Siskar, the affected employees worked in Arnette’s customer service, production, shipping, and accounting departments in Arnetee’s San Clemente, California offices. The founders of Arnette, including President Greg Arnette, COO Bruce Beach, Designer Kip Arnette, and Siskar, are continuing on with the brand.

"Obviously this was a really difficult move to make," says Siskar. "Our industry is really tight–we don’t hire people off of classified ads. Usually everyone who works here is a friend or a brother–it’s one big family where we all have extended relationships outside of work. We all barbecue or go to the beach together on the weekends.

"But once everyone steps back and takes a good look at the business, this move–although hard–makes sense from a business perspective," continues Siskar. "Luxottica has these same systems in its New York offices."

Siskar says these New York departments were designed with Luxottica’s tremendous diversity in mind, and will ultimately help improve product quality. The brands Luxottica owns offer more than 2,250 models of frames in a wide array of designs and colors. More than 500 new styles are introduced each year.

"What we’re striving for is improved customer service, supply–product delivery will be immensely better, so will be the availability of raw materials," he says. "With the supply better, product quality a lot better, and customer service better, we expect to be able to give retailers a greater retail margin."

On April 28, 1999 Luxottica announced that it was purchasing the assets and liabilities of Bausch & Lomb’s sunglass business for 640 million dollars. This transaction included the brands Ray-Ban, Revo, Arnette, and Killer Loop.

At the time of the announcement Leonardo Del Vecchio, chairman and founder of Luxottica, said, "We’re excited about the potential economic and strategic synergies of the Bausch & Lomb sunglass business for our shareholders. It has been a strategic focus for Luxottica for several years to build our presence in the quality sunglasses business. With this we add the most prestigious sun brands in the world to our portfolio."

In spite of the layoffs, Siskar says Luxottica has been beneficial for the Arnette business. "Before, Bausch & Lomb was really looking for double-digit growth and didn’t care how they got it. Now we’re breathing a sigh of relief. I can do my job and keep us strong in the core market. Sure, you can always find a way to hit double-digit growth, but if things don’t add up on the earnings side of the equation, it doesn’t mean anything. We’re growing realistically, keeping our distribution where it should be, and making money. Right now, everything is coming together."

Siskar says these layoffs will be a one-time incident: "I can confidently say that we don’t expect any more of these types of actions whatsoever."

Siskar says that even though many aspects of Arnette’s customer service, production, shipping, and accounting departments have moved to New York, the heart of the brand remains in San Clemente. "We have a lease on building until 2002," he says. "After that, who knows? However, I’m sure of one thing: Arnette will remain in San Clemente. So much of the vibe of our entire market comes from Southern California, it would be crazy to move it."

According to the Luxottica Group’s Web site, the company is the largest supplier of mid- and premium-priced eyewear in North America and Italy, and a leading supplier in Europe.