Snapshots of Optical’s 10 Largest U.S. Retail Players

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Luxottica Retail

Against the backdrop of Luxottica Group’s senior level management changes, which, at the beginning of this year saw founder Leonardo Del Vecchio assume the executive chairman role overseeing markets, working with the CEO of products and operations, Massimo Vian, the company reported that its overall sales in Retail North America (RONA) group were a major “growth engine” for the group in fiscal year 2015. LensCrafters in North America strongly contributed with comparable stores sales up by 4.3 percent. A major reinvestment in LensCrafters via a new store design is in the works to debut this year. In addition, in November 2015, the company announced a new agreement with Macy’s, to bring LensCrafters to as many as 500 Macy’s department stores in the U.S. over the next three years. The first of those locations is to open later this year.

Also fueling growth in 2015 were the opening of 44 new optical departments within Target Stores in the U.S., with the division of Retail Optical North America generating double-digit gains for the period.

In addition to 852 Lenscrafters stores operating in the U.S. and P.R., Pearle Vision moved more locations into a franchise model, operating 410 franchised units and 63 company-owned Pearle locations in 2015. The company’s licensed brands unit also includes 556 Sears Optical locations in the U.S. On the luxury side of the business, the group oversees Ilori/Optical Shops of Aspen, Oliver Peoples stores and, at the end of 2015, two Alain Mikli stores.

In February of this year, a series of senior leadership changes were announced in RONA under the direction of Retail North America president, Nicola Brandolese. Mary Anne Stangby, formerly SVP & GM of Sears Optical was promoted to SVP & GM of Sunglass Hut North America (SGH). Pete Bridgman who had been SVP & GM of Pearle Vision was promoted to SVP & GM of LensCrafters. He assumes the role from Eric Anderson, a longtime Luxottica executive, who left the company.

Alexis McLaughlin, SVP & GM of Target Optical added Sears Optical to her leadership responsibilities, managing both of the group’s hosted environments. Target and Sears now have two different leadership teams reporting to her. Alex Wilkes, formerly VP of eyecare for LensCrafters, was promoted to SVP & GM for Pearle Vision.

This year’s estimates for Luxottica Retail’s U.S. sales also include estimated revenue from the Glasses.com e-commerce business.


Vision Source

After it reported a milestone in December 2014 by adding its 3,000th location, Vision Source continued its expansion in 2015, adding over 260 additional locations throughout the year. The group has over 4,000 members.

The group aligns independent optometrists for the purpose of growing their practices, lowering their cost of goods and sharing best practices to increase their profitability.

Each member of Vision Source is a franchised member, an independent optometrist who owns their location and manages their location, leveraging the franchise as they deem necessary. Vision Source members pay a fee based on practice size.

The group’s suite of practice enhancement solutions includes: local leadership/mentors, development of managed care relationships, practice management consultation, staff training and performance programs, as well as practice and group marketing.

The group was acquired by Essilor of America, a longtime business partner, in a move announced in July 2015 and finalized this past fall.

The company launched Optical Dream in 2015, a program designed to enhance patient experience and increase optical sales, via trainings, webinars and local member meetings. Over 2,300 practices registered for the program which is being enhanced this year, along with general spatial analytics, helping members pinpoint where to locate new practices. A new program to expand digital and social marketing was also debuted at the group’s most recent annual member meeting, The Exchange, which marked Vision Source’s 25th anniversary.


Wal-mart STORES

With approximately 3,000 of its own Walmart Vision Centers and another estimated 582 Sam’s Club optical locations, Wal-Mart Stores remains entrenched at number 3 on VM’s ranking again for 2015.

Walmart opened some 263 new vision centers in 2015. (An additional estimated 228 Walmart Vision locations, operated by arrangement by National Vision, Inc., generate additional sales. These are tallied within NVI’s results but ranked as their own number on VM’s Leading Mass Merchants Chart on Page 50).

Independent optometrists operate private offices next to Walmart Vision Centers and Sam’s Club Optical Centers to provide comprehensive eye exams, lens fitting and prescriptions by appointment and on a walk-in basis. In addition, Walmart and Sam’s Club have on-site opticians in their respective Vision Centers and Optical Centers to assist with fitting glasses in store or in club.

Taken collectively, combining Walmart’s own corporate vision centers, the estimated revenue from its Sam’s Club opticals and VM estimates for the NVI leased vision departments within Walmart puts Walmart’s total vision care revenues at an estimated $1,746 million for 2015.


National Vision

Since being acquired by investment firm KKR in 2014, National Vision Inc. (NVI) has grown from 750 retail locations to 860 locations spread across the country. With estimated sales of $945 million in 2015, up from $890 million in 2014, NVI is solidly entrenched as the fourth largest retailer, having claimed that spot for the second year in a row.

NVI is one of the few retailers focused exclusively on the value segment of the industry. The company operates vision centers across the country, including America’s Best Contacts & Eyeglasses and Eyeglass World freestanding concepts and vision centers inside Walmart, Fred Meyer and on U.S. military bases. NVI also sells its products directly to consumers through 25 consumer-facing websites, including ACLens.com and DiscountContactLenses.com.

In June, 2015, NVI broke new ground, literally and figuratively, when it became the first major optical retailer to add smart glasses to its product mix. At the opening of its new Eyeglass World store in San Diego, Calif., NVI executives unveiled a wearable technology department featuring a special area stocked with state-of-the-art specs from Recon, Vuzix and Epson.

In December, NVI expanded its patient financing agreement with CareCredit, a leading provider of patient financing, across its family of brands. The multi-year agreement extends the availability of the CareCredit health, wellness and beauty credit card at select NVI retail locations nationwide.

NVI also initiated a new program with the Boys & Girls Clubs of America in 2016, kicking off what will be a multi-year national partnership to provide vision screenings, access to comprehensive eye exams and free eyeglasses for qualified members at select Boys & Girls Clubs around the country through NVI’s America’s Best Contacts & Eyeglasses retail locations. NVI will also contribute $1 million annually over the next three years to support BGCA and its preventive care and wellness initiatives.


Costco Wholesale

Costco Wholesale operated 475 Costco Optical vision centers in 492 locations in the U.S. and Puerto Rico for 2015, up from 457 in 2014. The company generated $915.2 million in revenue from its vision centers during calendar year 2015, a 9 percent increase over calendar year 2014.

Costco Optical’s optical locations nationwide provide frames, prescription lenses, contact lenses and a variety of lens options. For comprehensive eye exams, most have an independent doctor of optometry in or near the optical department. These ODs are contracted individually.

Costco Wholesale has taken a leading role in the battle over control of contact lens sales in the U.S. It recently banded together with 1-800 Contacts and Lens.com to form an advocacy group called the Coalition for Contact Lens Consumer Choice, which is pushing to deregulate sales of contact lenses and is opposed by major manufacturers such as Johnson & Johnson, Alcon and Bausch + Lomb as well as the American Optometric Association.


Visionworks

2015 was the second full year Visionworks operating nationally as a unified retail optical brand. The group is a division of HVHC, Inc., which also includes Davis Vision, all of which are headquartered in San Antonio, Texas. HVHC’s parent company, Highmark Health, is a Pittsburgh, Pa.-based enterprise that is one of the largest integrated health care delivery and financing networks in the country.

Visionworks continued its geographic expansion in existing as well as new markets during the year. Under the direction of president and CEO, Jim Eisen, Visionworks operated 699 retail stores in 42 states in 2015, adding 56 new stores last year in key metro markets such as Detroit, Michigan and the boroughs of New York City and realized a 5.3 percent increase in comparable store retail sales.

The national profile enabled more consistent and robust national media advertising for Visionworks. And, earlier this year, Visionworks became one of the first major optical retailers to roll out e-commerce capabilities to work along with its physical stores.

The national retailer said it is bringing its large assortment of eyewear and eyecare expertise to consumers who can browse, try on and purchase prescription eyeglasses, fashion frames and sunglasses and have them delivered directly to their door. Said Eisen, “Today’s consumer is constantly on the go, so we’re proud to make our products even more easily accessible by providing the ability to buy online, pick up in-store or select delivery to any destination nationwide. Plus with over 700 locations throughout the U.S., customers can easily drop in for a professional fit—it’s exciting to offer a complete multi-channel experience for our customers.”

Visionworks was also ranked number 150 on last month’s Forbes’ “Best Employers” list, among 500 companies among a range of industries and institutions, and was also ranked number 14 on the related “Best Employers in Texas” report.


MyEyeDr./Capital Vision Services

Already in a major expansion mode in 2014, MyEyeDr./Capital Vision Services continued on a path to bring both independent eyecare practices and strong regional groups into the fold, backed by a substantial infrastructure of support and service teams.

At the end of 2015, the group’s CEO Sue Downes told VM that MyEyeDr. operated over 200 practices, up from 139 at the start of the year. Downes said, “We remain highly selective with the practices we are acquiring and ultimately decide to move forward with less than 5 percent of the practices we speak to. We look for the right combination of quality clinician(s), strong reputation, positive financial metrics and geographic fit. The integration into the MyEyeDr. family is a key focus for us. We want the patients, doctors and staff to not feel a strain as a result of the acquisition and view the change in a positive light.”

Among the group’s deals in 2015 were dozens of single practices and additional optometric groups, along with acquisitions of The Hour Glass in Florida, Doctors on Sight in Maryland and Virginia, Eye Express in Florida, Vision Associates in Maryland and Halpern Eyecare in Delaware.

MyEyeDr.’s expansion into other U.S. geographic markets is continuing into 2016.


Refac Optical Group

Refac Optical Group, the eighth largest retailer, experienced a slight increase in sales in 2015, from $274.8 million to $275.2 million, although its store count rose from 736 to 780.

Refac has been owned by ACON Investments, a Washington, D.C.-based private equity investment firm, since 2011. Its main operating company consists of U.S. Vision, Inc. and Nationwide Vision, which it acquired in 2013. Refac’s retail brands are JCPenney Optical, BJ’s Optical, Nationwide Vision Centers, The Optical Shop at Meijer, Boscov’s Optical, Sears Optical, AAFES (in military locations) and 20/20 Vision Center.

Adam Levy was named CEO and president of Refac Optical Group in September, 2015. Al Bernstein is president of Nationwide Vision.


Eyemart Express, Ltd.

Eyemart Express, a leader in the value segment of the market, went from seventh to ninth position in this year’s Top 50 ranking. The company, now owned by private equity investment firm FFL Partners, generated $233 million in sales in 2015, up 2.1 percent from 2014. Its store count grew to 171, three more than the previous year.

The company’s retail brands are Dr. Barnes’ Eyemart Express, Dr. Barnes’ Vision 4 Less, Dr. Barnes’ Eyewear Express and Dr. Barnes’ VisionMart Express.

In June, Eyemart Express celebrated its 25th anniversary. Fueled by the investment from FFL Partners, the company plans to open nearly 200 more stores by 2020.

In April, 2015, FFL expanded its footprint in the optical industry with an investment in Clarkson Eyecare, a leading independent, full-service eyecare provider. Chris Harris, managing director of FFL, said Eyemart Express is run separately from Clarkson. Since then, FFL has helped Clarkson acquire two additional groups, Eyecare Associates and eyecarecenter, p.a. during 2015.


Cohen’s Fashion Optical

One of the oldest names in the New York City optical retail market, Cohen’s Fashion Optical is now completely a franchise operation, with 126 locations operating in 2015 in the U.S. and Puerto Rico.

In 2016, the group, which has inaugurated a new marketing approach over the past year, said it was embracing the spirit of founder Jack Cohen, who operated a pushcart business in the area and opened this first NYC fashion retail location 85 years ago.

At its original landmark shop on the corner of Orchard and Delancey streets on Manhattan’s famed Lower East Side, Cohen’s presented a new retail environment and concept shop. A new in-house eyewear collection, called The Collective, also debuted, designed to target a new and youthful eyewear customer.

“The Concept Store allows us to experiment with new products and is a vehicle to reach a younger audience with an on-trend $99 entry level collection, including our standard eye exam at Cohen’s level quality,” said Bob Cohen, president.