Rodney Grunseit

Rodney Grunseit heads up Sunshades Eyewear, Australia’s biggest privately owned eyewear company, which sells up to 3.5 million pairs per year.

The company, which was founded by Grunseit’s mother Betty Lasse, turns over $35 million a year and is looking to expand its international operations to diversify from the shrinking Australian market.

It is also hoping to capitalise on industry disquiet about the dominance of Luxxotica, which owns Ray-Ban, Prada and Versace and has been buying retailers and going vertical.

Grunseit tells SmartCompany about the Australian aesthetic and why bold glasses are becoming more popular.

What’s happening in the world of sunglasses, what trends are you seeing?

On the business side, the world of sunglasses is very interesting because there’s a major licensing manufacturing company called Luxottica and they’ve been buying retail and going vertical.

The nature of the marketplace is such that they have quite a large market share and all the other brands fight for their place in the marketplace.

Because they own most of the sunglass specialty stores almost globally what we’re then left with is a sunglass market that you have to decide if you’re an entry price point sunglass or if you’re a boutique sunglass that sells to high-end optometrists and sunglass specialty stores. In the middle it’s limited by how many stores are non-Luxottica.

Even in Australia they took Myer, they now run the Myer sunglass department as a concession so if you’re dealing with Myer, you’re dealing with Luxottica.

Myer was your customer, wasn’t it?

Yes. Now, Luxottica is still a customer of ours so we haven’t in fact lost the Myer business, we just supply Luxottica. But the nature of the marketplace has changed, you’re either someone who works with Luxottica or who doesn’t. We do, but you have to view the marketplace as quite changed to how it was five years ago.

What was it like then?

Well, there’s a lot more opportunity for sunglass companies so now as a result we’re in a fortunate position because we take licences, many which are global licences and the shrinking Australia marketplace because Luxottica is so large, it isn’t so frightening for us because we have global opportunities and we’re doing well globally as well.

And you’re referring mostly to Asia?

No, no the whole world. Well, Karen Walker is one brand that we’re selling to about 25 countries, as is Le Specs. We’re also in about that many countries so we’re doing very well with our export business.

Of course the cost of goods is increasing from China and wages and everything’s changing, even the internet, meaning that people can search for international brands and get good pricing.

So there’s all the standard challenges that the manufacturers are finding, but being an Australian company with the whole world open to it and many of its licences global licenses, plus the fact that we have an internet strategy that could work over the next few years means that we’re not held captive to the shrinking Australian market.

So what percentage market share do you have in the Australian sunglass market and how big is that?

So there’s about 20 million units brought in each year and we sell between 2.5 million and 3.5 million units a year so let’s say we’re about 12.5% to 15% of the market. And from what I’ve heard there are about 400 importers, so we’ve got a strong market share.

Have you bought companies?

No, we’ve reviewed it, but because we licence brands mainly buying a company doesn’t seem to fit into any model that we have right now. It’s not that we wouldn’t but it’s not a model that we can follow.

So the only reason you would do it is if you wanted to get a particular licence owned by a particular company?

Yes or they had their own brand that had substantial value and in Australia that doesn’t really exist.

Are there any specific reasons for designing here or would there be an incentive to outsource designing elsewhere?

Australia has the largest consumption of sunglasses per capita of anywhere in the world. The average sunglass consumer, which we figure is about one third of the population, on average buys three pairs per year. This compares with the UK, where we believe it’s one pair every three years. So it’s nine times the size per capita.

Is there a particular aesthetic that Australians look for?

Well, we’re not big followers of the European trends so we like lenses that cut out more sun glare and UV obviously. Sun glare is the main thing because we’ve got stronger sun.

In Europe, where they have sort of clear lenses with a light mirror coating on it and that was all the rage, in Australia we couldn’t sell them.

We do like quite large coverage and peripheral coverage and in Europe sometimes the trends are small. We don’t ever go as small as they do.

The trends right now are more in unique designs, so the more you can stand out from the crowd. It all became homogenised eyewear in the last couple of years, there hadn’t been any really big trends.

So looking at some of the trends for the last 15 years, you had wraps come in, then after wraps you had graduated lenses and maybe some diamontes on the lens that were the rage. Then after that you had oversized and then your wayfarer and the flat look.

Now since then there hasn’t been anything major for the last couple of years so our company for instance is trying more and more crazy design, unique design which the discerning customer that doesn’t want to look like everybody else will have a go at.

You’re talking about unique elements. I imagine looks and sun glare are important, but what other things are people looking for in sunglasses?

Well, crazy shapes and colours. We don’t mind taking a risk and it seems like especially the young consumer is looking for a bit of excitement and good value.

So most of your sales are sub $100, is that right?

I’d say it’s changing, but yes. Definitely most of the unit sales are sub $100 but we’ve got a growing portfolio of boutique brands. At the boutique end – and let’s say Oroton is called luxury, not boutique.

At the boutique end we’ve got Karen Walker, Ksubi, sass & bide, Henry Holland’s being launched next year, (Australian menswear label ZANEROBE) to some extent, but we’re adding a couple of boutique brands to our portfolio over the next few months.

And what do people get for those higher price points?

The protection in terms of UV protection is the same. We make sure all of our lenses pass the Australian standards. We do have some glass lenses at that top end and some of them have slightly better optical qualities than non-glass lenses but not that a normal eye could tell.

The quality is in the materials and the construction of the frames at that end. And of course with unique design what we’re paying for is the ability to open moulds and tooling that is just for our brands and it’s not like we open a mould or a tool that supplies the whole world with masses and masses and masses of stock.

We’re actually creating the moulds and the tooling to have limited releases of some exciting styles so we do have to pay for that somewhere, but then the consumer is getting something unique.

In terms of the margins I’m presuming sunglasses have higher margins than regular glasses?

No, I’d say they’re very similar and look, the margins are proportional to what you do. We represent brands and we build brands so we invest a lot in the display, in the stands and we invest a lot in marketing and creating the energy behind the brand and as well our service in the field.

Everyone’s got different margins in their business but it’s what you do with it. We invest a heap back into the marketplace.

I’m thinking about sunglass pricing versus optical.

Well, the marketplace has certainly changed since Specsavers came in and have been pushing the prices of optical frames down – which is probably more now in line with sunglasses. I get your point, yes.

Where are you looking to take the business now, what are your next steps?

International. This month our team and I are going to Paris to an optical fair, which we haven’t done before.

We’re working closely with some of the best designers out in the world but also some of the best retail brands in the world.

Everyone’s realising how homogenised and how strong Luxottica is. Luxottica, apart from Ray-Ban, have Prada, Versace, Dolce & Gabbana.

They have so many brands and the retailers are a bit nervous putting all their eggs in one basket and the fact that Luxottica have their own retail, so they want to mix up the ranging with some more exciting product.