HVHC, A Commitment to Vision

By
   
    David Holmberg, CEO, HVHC Inc.
SAN ANTONIO, Texas—With all of its Visionworks stores finally rebranded, its newest Davis Vision optical laboratory complete, and the sale of its Viva Eyewear division concluded, HVHC Inc. reached a milestone in 2013 that has set the stage for future growth in 2014 and beyond. After years of preparation, HVHC has completed the rebranding of 16 different optical retail chain brands into a single unified name across the country, Visionworks. Today, with 619 stores all operating under the same brand (and about 50 more planned for 2014), Visionworks is the third largest optical retail chain in the U.S., according to Vision Monday's 2013 list of the Top 50 U.S. Optical Retailers.

Headquartered here in the seventh most populous city in the nation, HVHC is located in San Antonio's downtown, in AT&T's old headquarters building overlooking the city's famed Riverwalk. HVHC's CEO, David Holmberg, cited not only San Antonio's central U.S. location as an optimum reason for doing business here, but he also credited the quality of life and the region's multicultural workforce as also beneficial.

In downtown San Antonio, HVHC's headquarters building houses a Visionworks store on the ground level.
"We build in America because we believe in America," he told Vision Monday on a recent tour of HVHC's headquarters. "We believe in doing good business, and when you're doing good business you can do good works. We've had the opportunity to do good works in the community, and in turn the community has supported us."

Just last year, HVHC added 1,200 manufacturing jobs to the region, according to Holmberg, when the company opened its newest, 120,000-square-foot, state-of-the-art optical laboratory in Richland Hills, Texas, not far from the company's headquarters. Now with just under 19 million members, the company's managed vision company, Davis Vision also operates other labs in nearby Shertz, Texas; Plainview, N.Y.; and Newtown Square, Pa.

The road that led here began in 2006 when insurance company Highmark Inc., HVHC's parent company, purchased Eye Care Centers of America's 384 optical stores in 36 states. In an effort to create a vertically integrated model, these stores joined the 89 Empire Vision Centers stores in New York, New England and Pennsylvania that Highmark owned and operated through Davis Vision at the time.

Vision Monday met with (l to r) Celina Burns, president of Davis Vision; David Holmberg, HVHC's CEO; and Jim Eisen, president of Visionworks, at HVHC's headquarters.
In 2008, Holmberg became CEO of what was then known as Eyecare Centers of America, and Jim Eisen became chief operating officer, moving up to president at the end of 2009. Today, Holmberg is CEO of HVHC, and Eisen is president of Visionworks of America, Inc.

More recently, Celina Burns was named president of Davis Vision in 2012. Her background includes 25 years of experience working for health insurers and health and welfare professional service firms including Humana, Prudential Financial and Aetna. She joined Davis Vision from Buck Consultants, a Xerox Company based in Dallas, which manages private health insurance exchange, RightOpt.



Envisioning an Integrated Model
All three executives recently sat down with Vision Monday to discuss the recent growth of their companies and the plans they have in store for the future. Holmberg explained his vision of a "synergistic integrated model" consisting of HVHC and its divisions, Visionworks and Davis Vision. (The company had also acquired frame manufacturer, Viva International, in 2005 but sold it to Marcolin SpA late last year.)

"Because it's not a public company and not a private equity company, Highmark has a long-term view," Holmberg said about HVHC's parent company, one of the country's largest insurance firms. He explained that Highmark views HVHC as a strategic asset, citing the fact that Highmark's CFO, Nanette DeTurk, is the chairperson of HVHC's board of directors. Viewing "vision as a critical part of overall wellness," Holmberg defines his own long-term view for the growth of HVHC and its divisions as "an integrated vision model aligned with the health care world."

Prior to Holmberg's ascent to CEO of HVHC, its different divisions were managed by a holding company that viewed them as separate businesses. However, he implemented a strategy that he describes as "very different than the holding company." He told Vision Monday that he believes in an integrated model of "insurance, stores and manufacturing" as the best way to "stay focused on the customer." And while HVHC has built a "successful integrated model" with Davis Vision and Visionworks, there's still "a long way to go," he said.

 Jim Eisen, president of Visionworks, oversaw the rebranding of the country's third largest optical retailing chain.
Rather than being displayed separately, sunwear brands share space on the boards with their ophthalmic counterparts.
The synergies between Visionworks and Davis Vision are the legs upon which the integrated company stands, according to Holmberg, who said that the strategy combines value eyewear with managed vision care. He told Vision Monday that this plan was developed in 2008 when they "concluded that the value space was the biggest opportunity out there" combined with the "importance of managed vision care," with the latter growing in importance. "Managed vision care would become even more important with aging baby boomers and the economy," he said, explaining his focus on one of HVHC's divisions, Davis Vision.

Reframing Eyecare
Davis Vision serves its nearly 19 million members with a provider network of 17,000 optometrists, 90 percent of whom are independents, Burns told Vision Monday.

In June of last year, following Burns' appointment as president in 2012, Davis Vision launched its 'Eyecare Reframed' brand strategy. Aimed at educating employers and consumers about eyewear and eyecare, the company's new messaging is focused on engaging consumers to take a new look at eyecare.

Among the messages that Davis Vision's Eyecare Reframed campaign emphasizes are its "directly controlled, non-outsourced national lab network," a "broad product choice which emphasizes selection and value from leading lens manufacturers like Essilor, Zeiss and Davis Vision private labels," and "newly updated frames for members and providers with Davis Vision's exclusive collection, to include brand and proven best sellers." As part of the new campaign, Davis Vision launched a redesigned website in the third quarter of 2013.

Burns envisions increasing opportunities in the managed vision care field. "Vision was historically treated as a throwaway benefit," she told Vision Monday. "That is so three years ago." Now, she's putting a lot of focus on private insurance exchanges based on a trend toward employers providing defined contributions that enable their employees to shop for their own health coverage. "The private sector is well ahead of anything on the public side," said Burns, "and it's been happening for the last eight years." She observed that about 40 percent of the market is in some form of defined benefit, citing the example of Walgreens, an employer which announced in September 2013 that it was giving its employees a set amount of money to choose their medical coverage from an online insurance exchange.

16 Brands + 2 Years = One Unified Brand
At the end of last year, after more than two years of hard work, Visionworks successfully completed its rebranding initiative. "The completion of our nationwide rebranding is an exciting step forward for our integrated business model, which we believe is a sign of the future of the health care industry," said Holmberg.

 Davis Vision's new 120,000-square-foot optical lab in Richland Hills, Texas, can produce 20,000 jobs per week in two shifts.
Eisen, who helped lead the effort, said, "Our rebranding initiative is a key element of our integrated business model." The challenge was to take 16 different brands, with diverse ownership and management structures, and unify them all. "There were a lot of deep roots and many family businesses that thought we wouldn't be around very long" due to previous ownership changes, Eisen told Vision Monday. "We had to establish that we would be true to our vision and could be trusted. The rebranding was not just a name change but a complete culture change around the customer."

To start, changes were first made to the Binyon's group of stores within the ECCA chain to test market them before rolling them out to hundreds of stores throughout the country. This included roleplaying with associates to determine how customers might react. The Binyon's logo slowly shrunk while the Visionworks logo gradually got bigger. "We didn't want customers to think we were bought," Eisen said.

Another change came when the company shifted from in-store to centralized manufacturing, which now stands at a ratio of about 50/50.

Part of the rebranding effort involved determining the Visionworks vision, which Eisen described as "the most frames, the best people, and the right prices." Each store carries a large selection of about 2,200 frames.

Now with 619 stores, and at least 50 more planned for 2014, Visionworks' growth is primarily organic, but it's not ruling out acquisitions, according to Eisen.

In addition, Visionworks will also begin online retailing in 2014. "This year will be the year," Eisen told Vision Monday.

'Better You 3.0' TV Campaign
To promote the unified brand, Visionworks will begin a nationwide television advertising campaign in the first quarter of this year. "We are focusing on services that differentiate Visionworks from our competitors," Emily White-Keating, MBA, Visionworks' vice president of marketing, told Vision Monday. "We will still focus on the value proposition that we believe is superior at Visionworks, but we want to make sure we also focus on the customer 'pain points' when buying eyeglasses and how Visionworks will alleviate them."

Described as "Better You 3.0" the television spots follow an earlier "Better You" campaign launched in June 2012. The new spots take the message beyond just talking about price, including messages such as "Visionworks takes hundreds of insurance plans, including Davis."

With rebranding complete and the company's manufacturing capabilities expanded, HVHC and its divisions are poised for further growth. When asked his goal, Holmberg cites 1,000 stores as a benchmark he'd like to see Visionworks achieve. Considering how far they've come in a relatively short time, that doesn't seem out of reach, with Holmberg and his team remaining committed to their vision of "insurance, stores and manufacturing." ■

jsailer@jobson.com