Snapshots of Optical’s 10 Largest Retail Players

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Luxottica Retail

 
Luxottica Group’s Luxottica Retail division, leading the VM Top 50 Optical Retailers for the 12th consecutive year, felt the recession’s impact in 2010: its total optical sales dropped by an estimated $88 million for the year.

Luxottica’s flagship LensCrafters chain is currently emphasizing one-hour service along with sunwear and premium lenses, continuing a strategy launched in 2010. This summer, LensCrafters rolls out a new high-definition lens program as well as in-store digital measuring, plus an expanded sunwear offering. Meanwhile, Luxottica Retail continues to convert Pearle Vision stores into LensCrafters units, with 30 to 40 such conversions planned for 2011, while continuing to promote Pearle franchising.

Luxottica Retail’s management team shifted early this year, with former president Kerry Bradley taking a new role as chairman, vision development. Liz DiGiandomenico, previously president of the EyeMed Vision Care managed vision operation, shifted to president, Luxottica Vision Care. Mark Weitel is now president/general manager of LensCrafters, while Seth McLaughlin oversees both Pearle Vision and Licensed Brands as executive vice president.

Wal-Mart Stores


 

Now in its 21st year in the optical business, Wal-Mart Stores is estimated to have topped the 3,000 mark for company-owned vision centers in its U.S. discount stores and warehouse clubs during 2010.

The mass merchant’s optical operation manufactured more than 5 million pairs of eyeglasses last year; sold with a one-year breakage guarantee, Wal-Mart’s glasses have an opening price point of $38 for a single-vision pair. The company’s vision centers also sold more than 11 million boxes of contact lenses, aided by its ongoing alliance with 1-800 Contacts.

About 2,500 independent optometrists practice in Walmart Vision Centers and Sam’s Club Optical Centers, according to the company. Wal-Mart’s optical operations are part of the retail giant’s health and wellness segment, headed by Paul Beahm, senior vice president for health and wellness.

HVHC Retail Group


 
 
HVHC Retail Group, a Highmark company, added another 18 new locations during 2010, including eight in parent Highmark’s Pittsburgh home base; five store closures during the year gave HVHC an aggregate gain of 13 locations. Those new stores boosted HVHC’s optical retail revenues by more than $24 million last year compared to 2009 totals.

Under David Holmberg, HVHC’s president and chief executive officer and chairman and CEO of ECCA, HVHC Retail Group continues to update its optical laboratories—which serve its own stores, outside retailers and eyecare practitioners who are providers for HVHC’s Davis Vision managed-care business.

In the last year or so, the company has standardized the websites of its various retail brands, including Visionworks, Eye Masters and Vision World. Each site offers identical graphics, as well as consumer information on topics such as lens technology; each also offers online contact lens sales through sister chain Empire Vision’s Lens123 Internet operation (another example of HVHC’s synergies).

National Vision


 
 
National Vision continues to emphasize expansion of its everyday-low-price America’s Best Eyeglasses & Contacts chain, adding 39 more locations—for a total of 276—during 2010. National Vision also operates leased optical departments inside Walmart and Fred Meyer discount stores, its heritage host environments, and the company has begun to expand its Eyeglass World chain, acquired in 2009, while adding more optical locations on military bases.

Recognizing a need to revamp its point-of-sales technology to keep pace with its growth, National Vision recently announced a project to replace and update its retail POS and practice management system, with the first phase expected to be completed by late 2011.

Reflecting the philanthropic interests of Reade Fahs, National Vision’s chief executive officer and president, and his team, the company launched a not-for-profit foundation, Frames For The World, last September. The foundation was established to fill the need for low-cost, good quality eyewear in poor and developing countries.

Costco Wholesale

 
 
Costco Wholesale continues to expand its optical presence, adding another 10 everyday-low-price Costco Optical vision centers within its U.S. warehouse clubs during 2010.

Since its 2011 fiscal year began at the end of August 2010, Costco Wholesale has opened 11 new clubs, including two so far in calendar 2011, for a total of 425 U.S. locations as of last month. The company has said it expects to add six additional warehouse clubs in the U.S.—most with optical departments—by the time its FY 2011 ends on Aug. 28.

With its basic individual and business memberships priced at $50 annually, Costco currently has more than 62 million warehouse-club cardholders, representing 34 million households and providing a built-in traffic flow for its in-store Costco Optical locations. The company has also updated its optical operations’ online presence, adding to its website a Healthy Eyes section that recommends an annual eye exam, and providing information on frame selection as well as details on ophthalmic lens options.

Refac Optical Group

 
 
Refac Optical Group got a new owner in mid-March 2011, when ACON Investments acquired the company from an affiliate of Palisade Capital Management (which retained a minority share in the leased-department chain). Refac’s current management team—including chief executive officer Dave Pierson and Bill Schwartz, president of Refac’s main operating subsidiary, U.S. Vision—remains in place. As part of the ACON transaction, management took an ownership position in Refac.

According to Pierson, the new ownership will spawn several growth initiatives with the company’s existing hosts—including primary host JCPenney—and with new host stores as well as free-standing retailers.

One question mark for Refac going forward could be a change in status of host BJ’s Wholesale; Refac took over operation of the warehouse club chain’s optical departments in 2008. After closing five clubs early this year, BJ’s executives announced that they are exploring “strategic alternatives,” including a possible sale of the company.

Eyemart Express

 
 
“Value” retail chain Eyemart Express continued to expand last year, under chairman and founder Doug Barnes, OD, and president Jonathan Herskovitz. The company added 28 locations during 2010—surpassing Barnes’ target of operating 125 locations by the end of last year—and increasing its annual sales by more than 15 percent. As of last month, the 21-year-old chain was operating in 30 states, with 30 locations in its home state of Texas alone.

Eyemart Express is still focused on its “everyday low price” philosophy, emphasizing “two-pair” deals such as two pairs of single-vision eyeglasses beginning at $57.92 (down $10 from last year’s offering), while promoting single pairs at an unchanged opening price point of $38.74. In addition, the chain offers a free, one-year breakage warranty providing unlimited replacements of broken frames as well as a $29.95 Protection Plus plan.

Cohen’s Fashion Optical

 
 
The venerable Cohen’s Fashion Optical chain—whose roots go back 84 years to a pushcart selling eyewear on New York City’s Lower East Side—continues to seek additional franchisees, including existing stores to be converted to Cohen’s locations. The chain ended 2010 with 114 stores in seven Eastern Seaboard states plus Puerto Rico; Robert Cohen, OD, Cohen’s president and chief executive, continues to direct the chain’s daily operations.

The Cohen’s stores actively work to retain patients through eye exam recalls, direct mail programs and Internet marketing, including frequent discount coupons available on the Cohen’s Fashion Optical website. In addition to accepting managed vision plans, the chain offers customers its own interest-free finance plan.

Though the company’s website, an Internet Eye Exam Scheduler available for every Cohen’s location allows patients to set up their eye exams online. Tuning into today’s social media, the chain also has an active Facebook page as well as a presence on Twitter.

For Eyes/Insight Optical Mfg.

 
 
For Eyes continues to aggressively seek growth opportunities in existing and new markets, according to chain executives. The company is also investing in online options, using its web presence and social media to build sales in existing markets as well as to attract business in markets in which it does not currently have brick-and-mortar stores. For Eyes will launch a new, updated Internet site late this year.

Store renovations are also a top priority. The company is remodeling stores based on a new concept launched in 2010 “to provide exceptional customer service within a retail environment that utilizes technology to facilitate associate and customer interaction at the highest level,” which will be rolled out throughout the chain.

For Eyes uses in-store merchandising designed to reinforce its value proposition, and links an emphasis on customer service with an aggressive marketing campaign aimed at both existing and new customers, using a variety of traditional and new media sources.

ShopKo Stores

 
 
Last year, mass merchant ShopKo Stores—a pioneer among mass merchandisers in the optical business since 1978—reached an estimated $85 million in eyewear/eyecare sales through 137 ShopKo EyeCare Centers.

Most of ShopKo’s vision centers are in its discount stores in small- to mid-sized cities; ShopKo also operates EyeCare Centers in two
of its six ShopKo Express drugstores.

In 2010, the discount chain launched a new Hometown store concept, targeting smaller markets. One of two Hometown locations opened in Wisconsin last year contains an optical department; at least one more set to open this year will have optical as well.

ShopKo’s eyecare operations include offering consumers online ordering of contact lenses via its recently revamped website. The site does not sell Rx eyewear online, but offers information on frame and lens materials and styles, as well as promotions for products such as high-definition lenses.