Top 10 Snapshots

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1
Luxottica Retail

U.S. Optical Sales: $2,680M (est.)
U.S. Optical Units: 2,918


Luxottica Group’s Luxottica Retail division, heading the VM Top 50 Optical Retailers list for the ninth consecutive year, operated 2,918 optical locations in the U.S. at the end of 2007 (that U.S. total includes 392 franchised Pearle Vision stores). Those U.S. optical locations generated estimated revenues of $2,680 million in calendar 2007, up from $2,570 million estimated for 2006.

Luxottica’s 2007 retail expansion kicked off in February of last year with the acquisition of D.O.C Optics; 100 former D.O.C stores have since been rebranded as LensCrafters and Pearle Vision locations. Luxottica chief executive officer Andrea Guerra has said the company will continue to expand its retail base, although “more selectively,” during 2008. Current plans call for 30 new LensCrafters stores this year as well as 54 remodelings or relocations. In addition, Luxottica Retail will open 30 new Target Optical leased vision centers during 2008.

On the other hand, Luxottica Retail dropped one of its Licensed Brands hosts this year with the expiration of its lease agreement with BJ’s Wholesale; those 156 BJ’s Optical locations were taken over by Refac Optical Group.

2
Wal-Mart

U.S. Optical Sales: $1,335M (est.)
U.S. Optical Units: 2,942

Retailing giant Wal-Mart Stores opened about 187 more U.S. vision centers last year, ending 2007 with an estimated 2,472 company-owned optical departments in its Wal-Mart SuperCenters and discount stores, plus about 470 vision centers in its Sam’s Club warehouse clubs, for a total of 2,942 company-owned optical locations (making it the largest U.S. optical retailer in terms of store count for the first time). Wal-Mart’s optical revenues reached an estimated $1,335 million last year, up from 2006’s estimated $1,262 million volume.

Now part of Wal-Mart’s health and wellness segment, the retailing giant’s optical operations draw more than six million patients annually, according to the company. Wal-Mart’s four optical laboratories manufacture more than five million pairs of eyeglasses each year, 130,000 pairs per week.

According to Jeff McAllister, senior vice president of Wal-Mart Optical, the division’s mission is to provide “affordable, quality eye health care and eyewear for an unbeatable value.” That emphasis on eyecare as well as eyewear is part of Wal-Mart Stores’ overall message of delivering health and wellness programs for consumers, brought to the fore by John Agwunobi, MD, senior vice president and president, health and wellness. Agwunobi says the chain’s current goal is to “help people save money so they can live healthier,” whereas in the past the “save money” element tended to be preeminent.

Early this year, Wal-Mart Optical signed an alliance with 1-800-Contacts for a new CL program for consumers, set to launch this fall.

Wal-Mart plans to open about 120 new optical locations during 2008, according to McAllister.

3
Highmark Vision Holding/Retail Group
U.S. Optical Sales: $587.8M
U.S. Optical Units: 503


Highmark Vision Holding’s retail group retains third place on the VM Top 50 Optical Retailers list this year, with combined retail sales from its Eye Care Centers of America (ECCA) and Empire Vision chains reaching just under $588 million in calendar 2007, generated by 503 optical locations.

ECCA, which ended 2007 with 411 locations, moved to broaden its market penetration last year by entering the Chicago marketplace with its first Visionworks store there in February 2007; by year-end the chain had 19 locations in metro Chicago. The company plans to open 25 new stores this year--10 of them in the Chicago marketplace--and another 25 optical locations during 2009.

ECCA also started off this year with a major change in its executive suite: David Holmberg, former president of Cole Licensed Brands, took over as ECCA’s chief executive officer on Jan. 1. Holmberg succeeded former CEO David McComas, who retired at the end of 2007.

Syracuse, N.Y.-based Empire Vision Centers, owned by Highmark subsidiary Davis Vision since 1995, currently operates 92 retail locations, having added two more stores during 2007.

4
Costco Wholesale

U.S. Optical Sales: $458.4M
U.S. Optical Units: 374
Trade name: Costco Optical


Costco Wholesale slowed its optical expansion somewhat during 2007, adding just 12 new in-store, everyday-low-price Costco Optical vision centers last year, which brought its U.S. optical unit total to 374. (During 2006, Costco opened 26 warehouse clubs with optical.) Those new company-owned optical departments helped the membership-warehouse chain’s revenues climb to $458.4 million during calendar 2007, up from $397 million the previous year.

Costco also continues to operate in the worldwide optical market, operating 130 optical departments in its stores outside the U.S. at the end of 2007, primarily in its warehouse clubs in Canada, Mexico and the U.K.

Costco’s total worldwide warehouse-club store count reached 529 locations by the end of 2007; as of mid-April 2008, the company had already added another seven clubs. Costco executives have said the chain will open 20 to 23 new warehouse clubs (including relocations of four or five existing units) during its 2008 fiscal year, which closes on Aug. 31, down from last year’s original projection of 35 to 40 new clubs in FY 2008.

During the past year, Costco Optical has modernized its two optical labs--near its Issoquah, Wash., headquarters and in San Diego--adding new robotic equipment.

5
National Vision

U.S. Optical Sales: $405M (est.)
U.S. Optical Units: 473


With a firmly held position in the everyday-low-price segment of the optical market and an eye toward the country’s economic woes, National Vision has been expanding its high-volume America’s Best Contacts & Eyeglasses chain, which it acquired from Consolidated Vision Group in August 2005.

Privately held National Vision operated 169 America’s Best superopticals at year-end 2007, adding 58 locations since the acquisition. By the end of last year it also had leased opticals in 229 Wal-Mart stores (down from a high of 400 in 2001) and 32 Fred Meyer locations, as well as 40 vision centers on military bases and three free-standing Vision Center II stores.

The $88 million America’s Best acquisition has proved to be a major move in National Vision president and chief executive officer Reade Fahs’ strategy to find additional revenue sources as the leases on the company’s Wal-Mart and Fred Meyer vision centers gradually expire. America’s Best maintains a strong
marketing image in the discount optical market, advertising two pairs of single-vision eyeglasses plus an eye examination for $69.95, and offering consumers membership in its EyeCare Club--discounts on eye exams and eyewear.

6
Refac Optical Group

U.S. Optical Sales: $185M (est.)
U.S. Optical Units: 521 (est.)


With an estimated 521 U.S. optical locations--most of them leased eyewear departments hosted by various department-store chains--and estimated revenues of $185 million for calendar 2007, Refac Optical Group entered a new market segment this year, taking over operation of 156 leased vision centers in BJ’s Wholesale warehouse clubs. The BJ’s locations, formerly operated by Luxottica Retail, generated an estimated $36 million in revenues last year, and represent Refac’s first move into the warehouse-club optical arena, under president and chief executive officer Dave Pierson.

Lower-than-expected first-quarter results this year from its major host, J.C. Penney, may slow Refac’s expansion in Penney stores during 2008; this year J.C. Penney plans to open 36 new department stores, down from 50 opened or relocated stores during 2007. (Last August J.C. Penney announced plans to add 250 new locations between 2007 and 2011, 80 percent to 90 percent of them in its single-level, off-mail format, in which Refac’s U.S. Vision operation began opening its first optical departments last fall.)

The protection of the host environment gives Refac an advantage over free-standing optical retailers: its leased vision centers are cushioned from a U.S. recession because most of its customers hold the host stores’ proprietary credit cards, and can turn to those cards to make purchases if the credit limits on their general credits cards, such as MasterCard and Visa, are maxed out.

7
Cohen’s Fashion Optical

U.S. Optical Sales: $116M
U.S. Optical Units: 106


Cohen’s Fashion Optical jumped three places to number 7 on the VM Top 50 Optical Retailers list this year, in large part because operations of 16 General Vision Services (GVS) locations under the same ownership were consolidated under the Cohen’s corporate umbrella during 2007.

As a family-owned company with aggregate sales of $116 million during calendar 2007, the 84-year-old Cohen’s caught the attention of new investors. On Feb. 29, 2008, Bowling Green, Ky.-based Houchens Industries acquired the chain’s franchise division. The purchase covered 106 Cohen’s stores in the Northeast and Florida. Of those, the Cohen family retained 30 franchised optical locations: 14 Cohen’s Fashion Optical locations and the 16 GVS stores, which are being converted to the Cohen’s Fashion Optical format.

In addition, Cohen’s has already opened four new stores this year; more locations are being explored in New York City and other markets, for a total of about 10 this year.

Robert Cohen, OD, president and chief executive of Cohen’s, continues to direct and oversee daily operations of the business, along with Cohen’s Fashion Optical’s current management team.

8
EyeMart Express

U.S. Optical Sales: $95M (est.)
U.S. Optical Units: 75 (est.)


Established as a discount optical retailer in 1990, EyeMart Express now operates approximately 75 locations across 16 Southern and Midwestern states; all its stores have on-site optical labs and offer one-hour eyeglass service. In calendar 2007 the chain’s estimated annual revenues climbed to $95 million--retaining its eighth-place position on VM’s annual Top 50 U.S. Optical Retailers listing.

Headed by founder Doug Barnes, OD--who had previously launched the Vision Express chain, then sold it to Pearle Vision three years later--18-year-old EyeMart Express continues to stress its “everyday low price” philosophy in its marketing. The chain regularly advertises eyeglass deals such as single-vision glasses starting at $38.74 per pair, as well as a free, “no questions asked” warranty offering free unlimited replacements on frames for a year after purchase.

9
For Eyes/Insight Optical Mfg.
U.S. Optical Sales: $94M (est.)
U.S. Optical Units: 140 (est.)


Making its first appearance among the Top 10 eyewear/eyecare companies on VM’s Top 50 Optical Retailers list is the Hialeah, Fla.-based For Eyes Optical chain, which did an estimated $94 million in optical sales last year through an estimated 140 retail locations.

A privately held business since 1972, For Eyes Optical prides itself on being the first optical company to offer vision care consumers a high-value single package price combining frames and single-vision prescription lenses. Since its inception, For Eyes has committed itself to providing everyday low prices to its customers, according to company executives, and has continued to position itself as a value leader in the industry, offering two pairs of complete eyeglasses for $99.

For Eyes has a significant number of store locations in major market areas on the East Coast, from Boston to Florida, and in the Midwest, with a large store concentration in the greater Chicago market area. For Eyes also has stores throughout California and operates a specialized heath plan in California, For Eyes Vision Plan, Inc. During 2007, the chain opened several new locations using a new store prototype design in Chicago, Virginia and Massachusetts. Company executives said For Eyes will continue to build store density in existing markets in 2008; they also plan to explore several expansion opportunities in new market areas.

10
Emerging Vision

U.S. Optical Sales: $90.1M
U.S. Optical Units: 158


With 12 company-owned stores and 146 franchised locations generating $90.1 million in retail sales during calendar 2007, Emerging Vision--parent of the Sterling Optical chain--made a second major buying-group acquisition last year.

In August 2007, Emerging Vision acquired Canada’s The Optical Group, a 525-member Canadian group, for $3.6 million. That acquisition came on the heels of Emerging Vision’s $2.4 million acquisition of the 909-member Combine Optical Management buying group a year earlier. A new marketing campaign launched early in 2007 to attract potential franchisees also generated new franchised Sterling Optical stores in New York, Maryland and California during the course of last year.

In addition, the company saw a reworking of its top management team with the exit of Myles Lewis, chief operating officer, who resigned in July; at that time, chief marketing officer Sam Herskowitz took on additional responsibility as president of Emerging Vision’s franchise division. Christopher Payan remains as CEO.