Eyemart Express Sees Value in ‘Value’ as Economy Lags

‘Everyday low price’ format pays off as chain hits 100-store mark

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By Cathy Ciccolella: Senior Editor

CARROLLTON, Texas—What does it take for an optical retail chain to accelerate its expansion in a down economy…and to bring more customers through its doors at a time when consumers in general are tightening their purse strings?

 
The Eyemart Express location
in Midwest City, Okla.
For everyday-low-price player Eyemart Express—which planned to open its 100th store on Sept. 21, and expects to end next year with 125 locations—the nation’s economic woes in the last year or so have produced positive sales results. “This is a good time to be in the ‘value’ business,” declared Doug Barnes, OD, Eyemart Express’ chairman and founder, in an exclusive interview with VM.

Barnes opened his first Eyemart Express location in 1990, in Appleton, Wis. Today, approaching its 20th anniversary, the chain operates stores in 24 states; it generated $115 million in sales through 84 locations in calendar 2008. In addition to the Eyemart Express retail brand, the company has stores under the names Vision4Less, Eyewear Express and VisionMart Express.

Since the beginning, Eyemart Express has targeted the “value” niche in eyewear sales, maintaining its original model of emphasizing a “two-pair” price while describing its market position as “a full-service, super optical chain tailored to the value-minded shopper.”

Jonathan Herskovitz, a 16-year Eyemart Express veteran who was named the chain’s president in March 2009, said this approach offers “better value for our customers.” Sales numbers this year indicate the strategy is working: Eyemart Express saw its comparable-store sales grow by 6 percent in the first four months of 2009; since then, comp-store sales have slowed somewhat, but are still increasing versus last year, according to Herskovitz.

 
 At this year’s Eyemart Express annual meeting in Tucson, (l to r) Lou Stanley, OD, of Charleston, W. Va., chats with Eyemart Express executives Doug Barnes, OD, chairman; Tom Patera, OD, senior executive vice president; and Jonathan Herskovitz, president.
Package Pricing

Helping to fuel those comp-store gains are a four-tiered basic pricing structure: one pair of single-vision eyeglasses advertised at $38.74, two single-vision pairs for $67.92, two pairs with step-up frames but the same single-vision lenses at $98.61, and two pairs with progressive lenses at $117.92. The chain’s “brand name” and “designer” frame collections take the two-pair price points with single-vision lenses up to $138.96 and $198.23, respectively.

In addition, Eyemart Express offers one-hour eyeglass service on many prescriptions plus a free, one-year breakage warranty that provides unlimited replacements of broken frames.

Since the recession hit, the chain has made some downward pricing adjustments on certain items, according to Barnes, who said the moves “added more wind to our sails” in terms of attracting customers. “Our segment of the optical industry has become the largest because of the economy,” he told VM. “More people today are trading down from private practices or higher-priced optical shops as money remains tight.”

Managed vision is also a growing part of the chain’s business. In addition to its own Vision Vantage discount program, Eyemart Express generates about 12 percent of its volume through third-party plans. “And we hope to increase that and do more out-of-network provider work,” Barnes said. To help build its managed vision business, the chain hired Mark Locklear, formerly of National Vision, as director of managed care earlier this year.

Accelerating Expansion

Eyemart Express’ latest store-expansion wave was planned before the U.S. economy began tanking, Herskovitz recalled—“Then the economy started to weaken, but we continue to expand.”

The company’s expansion team—headed by Tom Patera, OD, senior executive vice president of Eyemart Express—has been focusing on new states and markets in this latest wave of store growth (Patera’s responsibilities also include recruiting fellow optometrists to work with the company). Recent states added to the chain’s roster include Oregon, Michigan, West Virginia, Georgia and Arkansas. Still missing from the Eyemart Express store map are much of the Northeast/East Coast (with the exception of Pennsylvania), as well as a swath of the Midwest from Nevada to Kansas and Nebraska.

In addition to helping Eyemart Express increase its sales volume, the lagging economy has offered the chain a boost in terms of its store expansion. Said Barnes, “With the current economy, in some cases we’re getting better rates on real estate—we can find A+ locations that in the past were not always available. We also can go into some larger markets than we might have in the past because good locations are becoming available at a reasonable price.”

The chain also plans its store expansion with an eye toward population coverage by local TV stations. “We like one- or two-store markets, but we’re also interested in some larger markets in which the TV presence expands into outlying smaller areas,” Barnes explained. “One of the factors in positioning a new store is the TV market, and how far one TV buy will reach.”

And there is one more way the chain has found a silver lining in the current national economic turmoil: “In this economy, we’re finding that advertising rates are now lower in some markets, as much as 35 percent lower in some areas,” Barnes said. “For example, the cost of television commercials is down today, so we can get more spots for the same amount of money in ad spending—that’s another factor that has helped increase our comp-store sales.”

Eyemart Express prefers to build its own new stores rather than going into existing locations. Most units range in size from 3,500 to 4,000 square feet, “although we may build some as small as 2,500 square feet if it allows us to go into a prime location,” Herskovitz noted.

The company’s newest stores sport a revamped interior design he described as “the best-looking store we have ever had, with a combination of colors, graphics and materials both on the doctor’s and the retail side.” In addition, “we are committed to buying the best equipment for our in-store lab and doctor’s side, including retinal cameras with monitors in each exam lane.”

Summed up Herskovitz, “We want our look to deliver value which exceeds the expectations of both patients and customers.”

Along with finding good store locations, the chain has been successful in finding good people, he added, noting, “We’re finding more skilled personnel available today than a few years ago.”

Employee Education

To deliver the Eyemart Express message to both new personnel and existing employees, the company is revamping its training methods, adding “more structure and a more organized approach,” Herskovitz said. Managers of newly opened stores are sent to Eyemart Express facilities in either New Mexico or Wisconsin for two weeks of training; in addition, members of the chain’s expansion team remain at a new store for a week or two after it opens to work with personnel there.

The chain also holds an annual meeting—which this year was held in Tucson in late April—to share experiences and chart its course forward. The 2009 meeting drew about 250 people, including about 70 affiliated ODs and roughly 95 percent of Eyemart Express’ store managers, along with suppliers.

“At the meeting, each Eyemart Express department head sat down with small groups of participants to talk about what we need to do to move the company forward and grow our business,” Herskovitz said. “Then the store managers told the home office people what needs to be done to provide even more value and service to our customers and patients.”

 
Eyemart Express’ newer stores, such as this location in Bakersfield, Calif., use this updated interior design.
Keys to Success

That concept of offering both value and service has been key to Eyemart Express’ success, according to the chain’s founder. Said Barnes, “Our idea has always been that our store personnel and doctors take care of the customer, and we take care of them. In fact, most of our best ideas that have led us to success have come from the people in our stores.”

How does Barnes feel about reaching the 100-store milestone, as the new Eyemart Express store opens in Tuscaloosa, Ala., this month, while being ready to move ahead to 125 locations (most of whose leases are either already signed or in negotiation) by the end of 2010?

“Years ago, I would think of how it would feel if we had achieved
a certain level of success, and 100 stores was a milestone we could work toward,” he told VM. “To achieve this goal, we had to improve our concept throughout the years. This milestone has been achieved with great people and their hard work and effort. I’ve always heard that people are your greatest asset,
and through our people we have delivered the best value and service while ‘outfriendlying’ the competition.”