2019’s Consolidation Impacted in Mid to Upper Tier, Growth of Value Sector

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Updated on May 20, 2020

NEW YORK— Calendar sales of optical services and products at retail were healthy. In a market that grew to nearly $37.5 billion in the U.S., according to The Vision Council’s VisionWatch tracking, sales grew at a nice pace over the prior year, for all ECPs, regional and national companies. Business was solid, for companies large and small. What changed the character of the optical retail landscape among the small and mid-sized regional operators was the still-strong fuel of private equity investment into the U.S. market, reshaping competition and creating organizations that could grow and scale. MyEyeDr. took on a significant investment from Goldman Sachs Merchant Banking to continue its expansion into the healthcare space in more markets, while FFL sold Eyecare Partners to PE firm Partners out of Europe, as it acquired Arizona’s Nationwide Vision.

Among the very larger scale national players, particularly those addressing the value sector of the U.S. vision market, organic growth also was healthy. Consumers’ new attitudes about purchasing, openness to digital technologies and receptivity to new product design and technology opened up many new opportunities for growth. VM’s ranking of the U.S.’ Top 50 Retailers reflects a new collective revenue record of $15.7 billion, based on estimated 2019 calendar sales. And, like the year prior, it was the high concentration of sales among the Top 10 retailers that was noteworthy. The collective estimated revenue of the Top 10 reached $13.4 billion, or 35.7 percent of the total vision care market. Among all the Top 50 retailers, consolidators acquired sizeable groups and investors came into the market acquiring groups that had already achieved a certain size.

Aggregation impacted the moderate to upper tiers of the optometric market and set up opportunities for smaller local players to band together, too. The escalation of acquisitions among leading independent optometric groups created several new sizeable entities in the Top 50, as organizations like Now Holdings, Keplr, Total Vision and AEG moved higher on the chart. VSP Global’s entry into the retail market, with the establishment of VSP Ventures, appearing in the VM ranking for the first time, as well as their acquisition of one of the country’s largest chains, Visionworks, was a notable shift for the managed vision care player who had focused its provider network on the private practitioners previously. Shopko Optical became a new company, standing up opticals which had performed well inside a pressured, older general mass merchant like Shopko Stores, while B.J.’s Wholesale took its sizeable optical business inhouse instead of operating it via a third party.