ESLOF - EssilorLuxottica's Margins And Power Could Erode To Well-Capitalised Warby Parker

• EssilorLuxottica charges high prices for frightfully cheap products, marking them up by a factor of 20x.
• While the retail model is holding in this industry, everything can be digitalised with enough technological prowess, even prescription eyewear.
• Relationships with exclusive fashion brands are an advantage for Luxottica, but ultimately the margin for the greater market could be eroded by Warby Parker's compelling prices.
• While Warby Parker itself might not be a good investment due to excessive expectations, it could damage Luxottica's stalwart profile, and does have moats in its own brand and capital.
• With the stalwart profile implying rock-bottom costs of capital, the EssilorLuxottica valuation looks clearly too rich given the possibility, even if not a probability, of meaningful threats.

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