Eye Care Centre Takeover on Target ..............

[Chris Ryser]

HONG KONG--Moulin International Holdings’ chief executive officer, Cary Ma, reiterated last week that the closing of the Eye Care Centers of America (“ECCA”) transaction remains on schedule and will immediately follow Moulin’s special general meeting on Feb. 28. Said Ma, “We are very excited about this transaction, as it combines our world-class manufacturing facilities with one of the largest optical chains in the U.S., providing us with a platform to offer a superior value proposition to consumers.” recently raised $81.3 million through placement of shares and convertible bonds.

[DocInChina]

This gets back to the issues raised on other threads about funding your competition. I have read posts by people saying they sell so much of a certain brand that they have to sell it. You create your own market in your own business. Yes it is easier selling a Ray Ban than another brand because of name recognition. But you can educate and sell equal or better product from other manufacturers and you have control of the future of your idustry.

We are seeing this agressive take over in the lens field. Hoya and Essilor and hungrily buying all they can find. When the playing field gets smaller and smaller, you will see what happens to pricing. I strongly support the independents and hope others do the same or plan to also.

Just so you have an idea what happens in market with limited competition....in China, a company whose name I will not mention (E-----r) sells V Comfort (1.49) with AR to the retail shops for the same price most of you sell to your customers. This should clue you in to what their target and goal is in the US.

[Chris Ryser]

[QUOTE=DocInChina]

................But you can educate and sell equal or better product from other manufacturers and you have control of the future of your idustry.

We are seeing this agressive take over in the lens field. Hoya and Essilor and hungrily buying all they can find. When the playing field gets smaller and smaller, you will see what happens to pricing.

QUOTE]

Doc, you just said what I been trying to knock into the brains of optiboard memebsr for the last 2 years.

Maybe if we continue with some support of people like you we might make them understand that the optical retail trade is paying their own commercial grave yards and finance the purchase of their commercial funeral homes .

[DocInChina]

Chris,

I believe that most people are well educated in our field but lack the necessary sales skills to be able to guide their patients to other product. To be frank, it requires less work and requires less effort to stay the current course that most people in our field are on and write off our words of warning. What our fellow 3 O's need to realize is that their customers come to them for their expertise not because Essilor, Hoya or Luxottica refer the customers to them.

I used to import never heard of eyewear from Japan that was beautiful and unusual. My patients loved the product and came in once a month to see what new product I brought in. Prior to manufacturing my own lens product I imported lenses from Japan (1.67) and brought the lenses out to show the patient. The envelopes were all in Japanese and my patients not only had visual feedback about the quality of the product but all my product had a story. Either the story about the eyewear designer, the story of the factory, the special material used... You can sell a pair of glasses or you can sell an experience along with fashion. Golfers will pay hundreds of dollars for anything that will improve their game. You need to change your patients perception of eyewear. Once you can affect a change in their perception with your words and products they will be yours for life and will listent to your words and advice.

Time to step off the soap box.

Doc

[rep]

I work for Luxottica, but I use to own retail stores for over 20 years and I couldn't disagree more.

Both of you are ignoring that the consumers wants branded products and the billions of dollars in advertising driving designer brands and branded products. Instead of using the power of positive reinforcement to say "yes" we carry the brand you are looking for. Your swimming upstream saying "No" I have my own brand that I personally think is better. No, you can't brag to your friends about it cause nobody has ever heard of it. No, you don't really know about the features and benefits or quality because your in house brand does not have any advertising to support you product, or anyone other than your patients wearing that product. There is no visual image of what that product will do for the consumer.

This may work in small markets where your the only game in town and can sell them anything However the instant the second optical outlet opens with brands supported by national advertising, point of purchase displays, cross product merchandising, celeberity endorsement and product placements in television and film, you have lost customers wheather your willing to admit it or not.

Yes, you can sell private label frames to some customers that you import by yourself, but there are huge segments of the population that want branded product and will not be truly satisfied with anything else.

Yes, I have heard of OD's and MD's that sell exclusively their own private brands, and some their own medicine and vitamins too! Right out of the office. But most of them are kooks, none of them have very large practices and even their own patients think they're are nuts. You know who they are in your community and you will be considered no different with your approach.

This approach shows a mom and pop optical shop/practice mental attitude that the professional knows best regardless of what the patient wants, instead of a upscale retail attitude to merchandising which is eating the lunch of the "professional" three O's because of their backward thinking regarding merchandising and retailing. Do you think all the retail chains are losing money by selling designer brands? How long would they last with just selling their own in house brands and nothing else? How long do you think your going to last with this living in the past strategy?

And if you don't think it is a living in the past strategy, look at yourself personally , What coffee do you drink? What bacon do you buy? What oil did you put in your car? What telephone are you using?
What clothes are you wearing? What computer are you typing on right now! You could have purchased generic products for all of them, but, you didn't.

Now ask yourself why, and tell us again why this dosen't apply to the optical business, just like every other consumer product.

If you think you have control of a 7+ billion dollar industry by selling you own private label products you are truly dreaming and have lost touch with reality.

If you haven't lost touch with reality, If you want to survive in today's retail optical market I strongly recommend you study retailing and product merchandising and carry the brands with stong national advertising that sell through rather than your own private label brands that have nothing but your own personal endorsement as to how wonderful they are and will sit on your shelves forever.

Rep

[drk]

Is this why Luxottica expects the independents to continue to do business with them?

Do they feel that they can make their product "irresistable" to stock because of big-time marketing/advertising?

[shanbaum]

I know Lenscrafters does national advertising - but does Luxottica do national advertising for any of their frame brands (other than Ray-Ban, which I seem to recall having seen)?

[DocInChina]

Well rep,

my 20+ years in the field have proven contrary to yours and your companies opinion. What makes a business mom and pop and run as a big business do not revolve around my coming on board with you and your companies philosophy. My practices were in a major metro city and were very successful notwithstanding my lack of support for your companies product. I ceased selling your companies product the day it ventured into the retail business. Your arrogance and belittling theories of retailing and marketing only furthers my point. Your brand is NOT the only brand in the market. As a matter of fact Marchon has wonderful brand names as does Safilo and along with numerous other companies. I really have no desire nor I care to "control" a 7+ billion dollar market. For me it is principle. Your company is competing with the 3 O's for retail dollars. Once your company crossed that line I knew that every nickel I contributed to Luxottica was a nickel that would be used against me and my fellow O's. You can write all the propaganda you like and spew your companies credo, it does not change the reality of what your company has done and what it will continue to do in the retail market.

As far as my personal consumer spending and what brands do I purchase....that's personal, not business. I buy from reputable businesses with knowledgeable people working in those businesses. If someone tells me buy this because XYZ is a famous brand..I walk out of the store because that person does not know their business nor their product.

Sorry, you have not nor will not convince me otherwise.

Doc

[impact500]

Shanbaum: "but does Luxottica do national advertising for any of their frame brands"

They did a few several years ago promoting the Luxottica name but I think none recently. In fact they even had a Super Bowl ad (not sure when, 5 - 10 years ago?). As I recall it was not an eye catcher. In fact I was not even sure most viewers would realize what was being promoted. It's also interesting that the Marchon ads seems to have disappeared over the past couple of years or perhaps I'm watching the wrong channels.

Rep: "consumers wants branded products"

Indeed true. Brand names drive a high and likely growing percentage of buying decisions. Also true however that it is becoming a bifurcated world with growth at both ends of the distribution - as examples managed care and brand names.

Chris: "the optical retail trade is paying their own commercial grave yards and finance the purchase of their commercial funeral homes"

LUX, Essilor, Hoya, Sola and Moulin seem to have no problem raising money in the capital markets. They have business plans focused on vertical integration. The independent optical retail trade will not determine the outcome. Eyewear buyers will. Thus far, market share data indicates the vertical integration approach is working. Eyewear buyers are remaking the future of the industry. Many do not like it but it is no different from other product segments. In fact our industry still remains very fragmented relative to most consumer products.

The capitalist system works. Smart independents will do just fine but the big guys will continue to get bigger until a smart and aggressive upstart with a better idea comes along - such as Dean Butler did 10 - 15 years ago. It will happen.

[Chris Ryser]

Both of you are ignoring that the consumers wants branded products and the billions of dollars in advertising driving designer brands and branded products.

The consumer only wants branded products because the "branders" pay big time money to advertise directly to the consumer, a fairly new psychology in advertising also used by the drug industry.

I represented 2 large European frame companies for 20 years at a time when frames were still made in Europe with local manpower. Advertising was done in professional magazines and with posters that were handed out to retailers for free.

Frames were SOLD to optical retailers and they would order, receive and pay.

Today the major frame companies give consignments under very strict contracts and already have a lot of retailers in a hard grip. But the retailer only pays what he sells, like the super markets that give the Coca Colas a shelv which has to be replenished periodically and the store pays what he sold.

If the optical professionals would take courses in sales psychology they would be able to sell a Fridge to an Eskimo and the brand name frame suddenly would become the same product as all the others but a few bucks more expensive.

Rep has some good arguments...............but dont forget.........he ghot trained to sell the fridge to the Eskimo...............and you the opticians are the Eskimo in this case.

[rep]

Is this why Luxottica expects the independents to continue to do business with them?

Do they feel that they can make their product "irresistable" to stock because of big-time marketing/advertising?

Not only are independents continuing to do business with Luxottica, those few independents who are still not doing business with Luxottica are looking at our programs, and purchasing product, because it is in their financial interest.

As a general rule, the more retail oriented a buyer/store is the more they have no problem doing business with Luxottica. They know that our brands sell through and that we have retail knowledge which helps them every day. We also send them lots of customers and no one else does that.

There is a huge difference between true designer brands and name brands. They have a much different advertising focus. The true designers have their own image campaign while house brands need their images for name recognition if nothing else. Product placement in film and television is much more in vogue for sunglass brands.

What do you tell patients/customers who are looking for Ray Ban's

Rep

I know Lenscrafters does national advertising - but does Luxottica do national advertising for any of their frame brands (other than Ray-Ban, which I seem to recall having seen)?

Yes they have from time to time. As I stated elsewhere house brands need their own advertising programs because they dont have outside designer support.

Rep


Impact 500

I agree about the split between upper end and managed care. One product line just dosen't work for both especially if your trying to market your own in house brand.

Well rep,

my 20+ years in the field have proven contrary to yours and your companies opinion. What makes a business mom and pop and run as a big business do not revolve around my coming on board with you and your companies philosophy. My practices were in a major metro city and were very successful notwithstanding my lack of support for your companies product. I ceased selling your companies product the day it ventured into the retail business. Your arrogance and belittling theories of retailing and marketing only furthers my point. Your brand is NOT the only brand in the market. As a matter of fact Marchon has wonderful brand names as does Safilo and along with numerous other companies. I really have no desire nor I care to "control" a 7+ billion dollar market. For me it is principle. Your company is competing with the 3 O's for retail dollars. Once your company crossed that line I knew that every nickel I contributed to Luxottica was a nickel that would be used against me and my fellow O's. You can write all the propaganda you like and spew your companies credo, it does not change the reality of what your company has done and what it will continue to do in the retail market.

As far as my personal consumer spending and what brands do I purchase....that's personal, not business. I buy from reputable businesses with knowledgeable people working in those businesses. If someone tells me buy this because XYZ is a famous brand..I walk out of the store because that person does not know their business nor their product.

Sorry, you have not nor will not convince me otherwise.

Doc

Doc

My post was about the strategy of brands not my companies brands as you have falsely implied. I never suggested Luxottica was the only brand, only the strategy of branding was valid. Evidently if you carried the products of the other companies, you thought branding was correct and were successful using branding. Why you would recommend otherwise is confusing.

As far as you principals are concerned, I also find your postings intelectually dishonest by mentioning companies you support that also have retail locations here in the US and abroad. Kind of like being just a little bit pregnant. Either you are or your are not.

You must be walking out of a lot of stores lately because good sales people ask question and make recomendations and those recomendation often involve brands that the public feels comfortable purchasing.

Every purchase by the public is a "personal" purchase and if you are not trying to appeal to the consumer why would you purchase ANY product?

While you paint everything Luxottica has done since 1995 negatively, the fact is they have supported and contributed to three "O"s and the industry in too many ways to mention here and will continue in the future.

Some will continue to battle windmills and others are and will continue to reap the benefits by partnering with companies that increase their bottom line, year after year.

Rep

[DocInChina]

[QUOTE=rep]Not only are independents continuing to do business with Luxottica, those few independents who are still not doing business with Luxottica are looking at our programs, and purchasing product, because it is in their financial interest.[QUOTE=rep]

I doubt it is anyones financial interest purchasing from a company that is also retailing the same product and competing against you. Obviously you and I will not come to agreement about that and no reason for us to do so.

[QUOTE=rep]As a general rule, the more retail oriented a buyer/store is the more they have no problem doing business with Luxottica. They know that our brands sell through and that we have retail knowledge which helps them every day. We also send them lots of customers and no one else does that.[QUOTE=rep]

I was aware of top 10 chains in the US not working or avoiding to work with Lux product. Again I am not in the retail field any longer and out of the US for a few years.


[QUOTE=rep]What do you tell patients/customers who are looking for Ray Ban's[QUOTE=rep]

We can order them for you if you like...but would you like to try brand XXX which are well known for these which have excellent features.

[QUOTE=rep]My post was about the strategy of brands not my companies brands as you have falsely implied. I never suggested Luxottica was the only brand, only the strategy of branding was valid. Evidently if you carried the products of the other companies, you thought branding was correct and were successful using branding. Why you would recommend otherwise is confusing.[QUOTE=rep]

I was specifically addressing Lux since you were the one to bring up your company. The thread was originally referring to lens companies. Any company that manufactures and goes head to head with their customers for retail business would also elicit the same words from me. I appologize if it seemed I was only targeting Lux.

[QUOTE=rep]As far as you principals are concerned, I also find your postings intelectually dishonest by mentioning companies you support that also have retail locations here in the US and abroad. Kind of like being just a little bit pregnant. Either you are or your are not.[QUOTE=rep]

As I said I have been out of retail for some time. If there are other companies using the same market philosophy then kindly add them to the list.

[QUOTE=rep]You must be walking out of a lot of stores lately because good sales people ask question and make recomendations and those recomendation often involve brands that the public feels comfortable purchasing.[QUOTE=rep]

If you understood my remark...if a sales person merely tells me a certain brand is best without giving me the reasons (features and benefits) then I do walk out because that sales person is not well trained.

[QUOTE=rep]While you paint everything Luxottica has done since 1995 negatively, the fact is they have supported and contributed to three "O"s and the industry in too many ways to mention here and will continue in the future.[QUOTE=rep]

The issue here is not the contribution your company makes to the industry. Many companies contribute and support the industry. How much retail dollars has Lux done since 1995 as Lenscrafters? The increase in sales from 1994 to the present is the dollar amount taken from the 3 O's in their retail sales.

My issue is not with you. Its obvious you are passionate about your business and your company and that is commendable. However, you must realize that there is a valid arguement against your companies strategy and how it can/does negatively impact the 3 O's. Our point of views are different and I really have no desire to press the point further. I will let your rebuttal to my posting be the final word.

Doc

[Chris Ryser]

...........Luxottica. They know that our brands sell through and that we have retail knowledge which helps them every day. We also send them lots of customers and no one else does that.

That must be the statement of the year.

A company that owns 35% of the optical USA retail market is steeering customers to the independents.

:( :( :(

[hcjilson]

I am going to repeat what I have heard. I have no direct knowledge of this but suspect its true because I have seen a steady increase in LC customers over the past year.

I have HEARD:

1. Lenscrafters no longer allows the use of your own frame when filling an Rx, even if its one they sold.

2. Lenscrafters will no longer (and maybe never did) repair frames.

3. The "in about one hour philosophy" is a thing of the past.

Again, this may just be rumor started by the competition, but its been good for my business if its true, and if it isn't true........maybe I'm just getting better at what I do! :bbg:

[DPalmer]

How did we go from a little news about Eye Care Center to this battle over Lens Crafters ? You guys have got to let it go and stop cryin about things you simply can not change.
HC it depends on where you go there are some of us who work at LC that will and do use a customers own frame even if it is not purchased from LC as long as the frame is in good shape and the customer knows it is under their own responsability if something happens to it . We also still do frame repairs if we can.The one hour philosaphy has been replaced by ready when promised but we still can and do them in about an hour if that's what the customer wants.

[hcjilson]

DPalmer, thanks for the timely reply and your input concerning LC. I was responding to a post above mine and wasn't really to concerned about switching the subject. I should know better than that! Are individual stores free to set their own policy or is it company policy at all times....When I said I had only heard about this policy, I should have said something to the effect of "my customers are telling me......"

In any event my point has been made in other threads.The independant can always beat the chain (in any industry) because the chain cannot respond to changing marke conditions in a timely fashion.They don't always do it but they can do it. In the Optical industry, the chains are not setting fashion trends,the consumers are. LC is in the unique position to be the manufacturer as well as the retailer which puts them in a favorable marketing position, but I agree that someone will come along with a better lightbulb. Its what drives business!

[rep]

That must be the statement of the year.

A company that owns 35% of the optical USA retail market is steeering customers to the independents.

:( :( :(

Chris,

You are totally out of touch with what has happened to Luxottica accounts that are taking Eye Med. Every year it has provided private practioners with more and more lives, contradicting your statements that Lux is out to put them out of business.

At first it was a trickle, now its a flood. The average practice in my terrority is seeing 150 per year with some offices higher than 500. That's from three to ten patients per week that would not be going to private practioners if US Shoe stilll owned Lenscrafters. When US Shoe did owned them NO private practioners could participate in any Eye Med plans. As a frame company Lux opened them up to the three "O"s on an equal basis.

You and others predicted that with the Cole purchase Lux would corner the market. What did Lux do? They eliminated the frame purchasing requirement, and increased the provider reimbursements.

Does that sound like people wanting to put three "O"'s out of business?

No other frame company sends practioners patients.

Rep

[Chris Ryser]

Chris,

You are totally out of touch with what has happened to Luxottica accounts ................No other frame company sends practioners patients.

Rep

There no bad feelings , from me anyhow against Luxottica, I am against big corporation control of any type of market not only the optical. Large corporation control on a world wide basis leads to a new type dictatorship and new type commercial governments.

The trend has well started and is continuing with Moulin jumping into the reatil businesss and Essilor taking over one lab after the other. so doeas Zeiss who just made the leap by gobbling up the SOLA's.

If you are sending patients to independent opticians, good for them but I would call that A CRAZY sceem. Nobody of a sound mind would send their competition the business. As I do NOT consider your company crazy, on the contrary, I would call them supert smart which in turn means, there is some reason.

Either you have been under pressure because sales to independents dropped over the last 10 month and you have to sweeten them up, or there is an other political reason.

I would like to here some comments form Optiboard members how much they increased business with Lux because they are now being sent patients by Lux companies.

[rep]

Silhouette Launches Retail Initiative with Retail Market Group, Envirosell

That's at least three other vendors selling retail.

Sales were up double digets last year and what's more Lux was profitable.

Rep

[Spexvet]

I can't wait to buy more Silhouette!

[Judy Canty]

When US Shoe owned LensCrafters, there was no EyeMed. There was LensCrafters Vision Care Management Systems. Because LensCrafters decided to enter the managed care arena pretty late in the game, it was very diffficult to play. Their purchase by Luxottica provided the perfect way to become a player, by increasing the number of providers from roughly the 1,000 LC locations to include independents who chose to participate. By absorbing the locations from Cole National et.al. EyeMed can begin to compete in the same arena as VSP, which was their goal from the begining.

[Johns]

How's that for a tabloid headline?:bbg:

We are seeing an increase in EyeMed, but a decrease in cash paying customers. It's not a huge number, but many of our regular customers that had no problem paying retail for a good product, are now on EyeMed. THe Lux rep has called more than once asking if there are any companies in the area that he can pass along to the EyeMed folks. He won't get their names from me!

So, this "flood" of customers that are going to be coming through your doors are the same customers, but now they're flooding in with a piece of paper that tells them that LUX has decided how much they will pay for their glasses, and how much profit the optical is now allowed / permitted to make.

Give me a break !!!

[rep]

When US Shoe owned LensCrafters, there was no EyeMed. There was LensCrafters Vision Care Management Systems. Because LensCrafters decided to enter the managed care arena pretty late in the game, it was very diffficult to play. Their purchase by Luxottica provided the perfect way to become a player, by increasing the number of providers from roughly the 1,000 LC locations to include independents who chose to participate. By absorbing the locations from Cole National et.al. EyeMed can begin to compete in the same arena as VSP, which was their goal from the begining.

Judy you are partially correct, about the name anyway. But not the development.

Lenscrafters Vision Care Management Systems was the 1st Eye Med program.
They had considerable power even then in my area with the largest metro contract for BCBS. Hundreds of my patients could not purchase their glasses from me, only Lenscrafters. Lots of city, state and local government contracts.

Just before Lux purchased them they were in the process of expanding their Lenscrafters panel with the help of AAO (American Academy of Ophthalomolgy) and Opticians, totally excluding Optometry. They send out request to opticians to be included in this panel with an $80 registration fee. Thousands signed up because the ophthalmologist they were working with urged the to do so and they did not want to be left out.

When Lux pruchased Lencrafters they looked over the plan and said they would not continue it because it did not include all three "O"'s by excluding Optometry. They had to pay the AAO a huge amount of money for dropping the contract and refunded the $80 to each optician. I know for a fact that most of the opticians in this town were signed up for that program as was every Ophthalmologist because it was their answer to managed care. (The Eye Med name was taken from a superstore operation opened in this town by an independent business man that was purchased by Lenscrafters)

If Lux had not purchased them, Lenscrafters/US Shoe would have gone head to head with VSP the "optometric" managed care plan that was started in 1953.

Since that time AAO has not developed their own managed care plan.

Now you know, the rest of the story.

Rep

[Judy Canty]

LVCMS was NOT an EyeMed plan. My last position with the company was as an account manager for LVCMS. LC had hired Joel Ehrinpries (sp?), a former VSP honcho, to head LVCMS. Until the Luxottica purchase, LVCMS was still trying to make the AAO model work. So far as the EyeMed name is concerned, are you talking about OptiWorld? If so, I was also involved in trying to integrate that program into the LC model.

[Chris Ryser]

So, this "flood" of customers that are going to be coming through your doors are the same customers, but now they're flooding in with a piece of paper that tells them that LUX has decided how much they will pay for their glasses, and how much profit the optical is now allowed / permitted to make.

Give me a break !!!

If this is the case, you get the same plus some more customers who actually will get the product for less money.

Lux in this case is still making the same at the wholesae level and also through their own stores. They are feeding the ants the sugar to trap them. Very clever.