Already launched last month in the U.S., Oakley's new “Beyond Reason” campaign is going live now throughout Europe, Middle East and Africa (Emea), where sales of the brand are growing at an annual average of about 20 percent, faster than in the rest of the world. The campaign centers on key athletes who are going to compete in the Olympic Games in London next summer, where Oakley is preparing a major media blitz, but will continue for the next couple of years.
The campaign will absorb a good portion of Oakley's marketing budget of around 12 percent of sales, which are expected to reach about $1.2 billion worldwide this year. Using point-of-sale, print, outdoor and digital marketing opportunities, it revolves around elements of authenticity, performance, innovation and passion. In the Emea region, it features prominent athletes sponsored by Oakley such as the South African sprinter Oscar Pistorius, the British cyclist Mark Cavendish and the Galician triathlete Javier Gomez. Beyond the Olympics, it also highlights motor sports champions such as Valentino Rossi, Fernando Alonso and Sebastien Loeb.
With the support of its parent company, Luxottica, which reported yesterday an 11.1 percent currency-neutral increase in total sales for the first quarter (more on this in EyeWear Intelligence), the brand is now sold in about 11,000 optical retail stores. Through a separate sales team, it is also offered in 5,000 to 6,000 sports stores throughout Europe. Company officials would not provide a specific number, but Oakley's sales in the region are said to be approaching $200 million a year, with a slightly higher turnover in the optical retail circuit than in sports retail. The number of stores has not changed much as the company prefers to achieve deeper penetration with all its products in premium locations. It is working more intensely with key accounts such as Go Sport in France, Sport Scheck in Germany, Stadium in Sweden, XXL Sport in Norway or Blue Tomato in Austria. Some of them are new clients.
A large part of Oakley's growth in the European sports market is coming from the expansion of its prescription eyewear program, the extension of the brand into new categories such as golf and the expansion of its line of apparel and footwear, with several new technical products such its compression boardshorts. Apparel and footwear have come to represent about one-third of sales. The growth of its core sunglass business in Europe was somewhat halted last year by manufacturing constraints, but it resumed its strong pace after the completion of a doubling in Oakley's production capacity in California in mid-2011. It should get a new impulse from the introduction of a new revolutionary design, called Radarlock, that allows sportsmen and others to change the tint of the lenses fast, easily and securely.
Privileging the wholesale channel, Oakley actually reduced to 13 the number of its single-brand stores in Europe recently by closing one of its two stores in the U.K., where it flagship in London's Covent Garden is delivering double-digit sales increases. It may open one or two more stores in the next couple of years, probably in the Middle East, but it is revamping its e-commerce operations to deliver a more comprehensive, integrated multi-channel retail strategy. For this purpose, Oakley Europe has hired an e-commerce business manager, Chris Hammond, who comes from Surf Dome. Last year, it had hired a new retail manager, Thierry Verdejo, who worked previously for Oxbow, Rip Curl and Salomon.
Frank Heissat, who took the helm of Oakley Europe in May 10, supervising both the optical and sports segments, is planning to take stronger action in promising markets such as Russia and Turkey. He is happy with the appointment last year of James Mills as country manager in the U.K., where his new sales team has been delivering excellent results.
