* Buys Coastal.com for $388 mln to boost online sales ..............................

[Chris Ryser]

UPDATE 2 - Essilor bets on sunglasses and China after weak 2013
Thu Feb 27, 2014 1:33pm EST

Aims to double revenue in sunwear to 1.1 bln euros by 2018

* Buys Coastal.com for $388 mln to boost online sales

* Sees margin gradually rising to 19.5 pct in 2016

* Sales growth slowed, operating profit missed consensus

By Natalie Huet


PARIS, Feb 27 (Reuters) - Lens maker Essilor is betting on appetite for trendy sunglasses among the fast-growing middle classes of China and other emerging markets to drive sales after weakness in Europe and North America weighed on 2013 earnings.

The French company is the world's largest opthalmic lens maker with a 37 percent market share, supplying eyewear makers such as Milan-based Luxottica. Its products span reading glasses that sell in India for the equivalent of a few euros to high-performance lenses costing hundreds.

But Essilor had to cut its sales growth forecast twice last yearand still missed this target, blaming a slower-than-expected recovery in Europeand North America, tough competition and delays in finalising someacquisitions.

The company now plans to focus more onsunglass lenses - which currently make up just 10 percent of revenue - aimingto double sales by 2018. The market in sunglasses is expanding twice as fast asthe corrective lens market, as consumers follow fashion trends and are willing to spend moreto protect their eyes from the sun's harmful effects.

Eight out of 10 Europeans already own proper protective sunglasses, but only one in 10 Chinese have them and the untapped potential in children is also huge, Essilor said.

"China's little emperors deserve good sunglasses too and we will make sure they get them," Chief Executive Hubert Sagnieres told analysts and reporters.

Essilor is aiming for like-for-like sales growth of 2.5 to 4 percent in 2014, after it more than halved last year to 2.1 percent. Analysts had expected higher guidance.
"The group's strategy is very good but the organic growth itforecasts in the short term is weak," said Antoine Belge of HSBC.

Essilor's shares dropped more than 3percent and were the biggest faller on France's CAC 40 blue-chip index.

Analysts said the focuson developing economies and more cyclical products implied higher risk.Weakness in emerging market currencies against a strong euro cut 3.9percentage points from sales growth last year.

But Cedric Rossi at Bryan Garnier & Co said the group's main markets had reached a certain degree ofmaturity and the shift to faster-growing markets should prove rewarding.

"With sunwear, there's a fashion effect that means the market isconstantly renewing itself. It's affordable luxury that's very sought after byBrazilian, Indian and Chinese customers," Rossi said.

Emerging economiesaccounted for more than a fifth of Essilor's revenue last year and posted byfar the strongest sales growth, driven by an 89 percent jump in Russia, 16-17 percent growth in China and India,and a 9 percent rise in Brazil.
Essilor is also looking to online sales to speed up growth andimprove its margin - excluding the impact of acquisitions - to 19.5 percent by2016, from 18.1 percent in 2013.
The acquisition of Coastal.com forabout $388 million should be slightly margin dilutive this year and next as theCanadian online retailer is currently loss-making, but Essilor hopes to turn itaround.

Essilor's 2013 operating profit rose1.5 percent to 843 million euros ($1.15 billion) on sales of 5.07 billion,below a Reuters poll for profit of 882 million on sales of 5.1 billion.


Check it out at -------> http://www.reuters.com/article/2014/...HealthcareNews

[Uilleann]

*snore*

[MikeAurelius]

^^ +1000

[Chris Ryser]

*snore*

That is why the world of optics is ...................................where it is

[optimensch]

The stock of E is down since the acquisition. Perhaps thinking people might question the wisdom of paying such an exorbitant price for such a money loser. For a fraction of the cost E could have started up its own e commerce site from the ground up. CC has no proprietary technology, and would have had nothing but mounting losses. with patience it could have been purchased for much cheaper. imho.

"The acquisition of Coastal.com forabout $388 million should be slightly margin dilutive this year and next as theCanadian online retailer is currently loss-making, but Essilor hopes to turn itaround"

HOPE being a 4 letter word!

They will not make this profitable by cutting costs. They can only make it profitable by raising prices. A lot. And raise prices they will. Except that will also choke off some of the demand for freebies which (especially) under-30 Canadians love and have been granted by CC for a while now. Good luck with that.

[Uilleann]

That is why the world of optics is ...................................where it is

I'm thrilled to know I was able to single handedly destroy and undermine the entire world of optics just like that! I knew I was a bad A...but I had no idea I was THAT bad A!

[MakeOptics]

I'm thrilled to know I was able to single handedly destroy and undermine the entire world of optics just like that! I knew I was a bad A...but I had no idea I was THAT bad A!

Dang Uillean had to go mess up an entire industry. Thanks a lot. ; )

Seriously though its the data that CC brings to the table, between CC, FD, and myonlineoptical E has enough customer data in the US and Canada to flick a switch and eat everbodies lunch. While using an E lab if they doubled the wholesale price tommorow a lot of folks would scramble to find another lab, raise prices on clients exhorbitantly, or take a loss. Theyre a snoring giant that everyone hears but doesnt want to wake up.

[Chris Ryser]

"The acquisition of Coastal.com forabout $388 million should be slightly margin dilutive this year and next as theCanadian online retailer is currently loss-making, but Essilor hopes to turn itaround"

HOPE being a 4 letter word!

They will not make this profitable by cutting costs. They can only make it profitable by raising prices. A lot. And raise prices they will. Except that will also choke off some of the demand for freebies which (especially) under-30 Canadians love and have been granted by CC for a while now. Good luck with that.

By using the old former Imperial Optical system and letting CC continue their successful way of loosing money while selling tons of glasses, which the conventional retailers will NOT sell. CC will also become a superb tax write off for E.

In simple terms, they will instruct the new aqusition to drop all purchasing from outside their E owned companies to a maximum of around 15%. Any monetary amount over this limit will be directly deducted from any monetary bonuses arranged with and for management.
This way E will now become the majority supplier of frames and lenses and all other supplies needed to make top quality glasses, purchased from their own inventory of suppliers, and make their margin at the front end by increasing quantities sold.

Advertising for Essilor products will not have to be changed, all they have to change is the brand names of lens frames and coating types that are already successful on the conventional retail, market and advertis and sell them as similar to .............so and so.

CC probably will not change much as many think, but Essilor will be the winner at the end, but also your biggest competitor while many of you just ignore ....................and "snore" and hope that this is only happening in dreamland.

And do not forget that WARBY PARKER has now the most successful website in the Optical worldwide and just about must be on Essilors wanted next list.

[Uilleann]

Essilor can do what they want. I'd be far more concerned with the likes of VSP / EyeMed / Davis / Spectera et al and their much more direct path to the profit in your bank accounts. We're still growing like mad, and our patients have never been happier. Going back to bed.

[optimensch]

"And do not forget that WARBY PARKER has now the most successful website in the Optical worldwide and just about must be on Essilors wanted next list"

actually the most successful website in the optical world, by a wide margin, is...........Google. there is no other company even close. No pure online optical, not CC, not WP is making profits, and maybe they never will. Google will always make plenty.

[Chris Ryser]

• 
  actually the most successful website in the optical world, by a wide margin, is...........Google. there is no other company even close. No pure online optical, not CC, not WP is making profits, and maybe they never will. Google will always make plenty.

Actually go on Google and ask for optical website listing and you will get the first answer as,

1. Optical Website Listing - OMS, Optochemicals
   
   Updated 03/11/2014, 974 optical websites listings and links, The Most Complete Optical Website Listing For Eyecare Professionals. To find the optical company, ..

1. Favorite Optical Websites? - OptiBoard

1. www.optiboard.com › ... › General Optics and Eyecare Discussion Forum‎
   ]Apr 1, 2004 - 6 posts - ‎5 authors
   Please, list your favorite optical web sites. What sites do you think provide valuable resources? Include any manufacturer, lab, retail, ...Thread: Optical Web Site Listing....................
   
   Thread: Optical Website Listing Reaches 550 Sites ...
   4 posts
   Jul 22, 2006
   
   More results from www.optiboard.com
   
   

That is what its all about the Warby Parker listing and not the Google being the biggest, we all know that

[MikeAurelius]

toot toot toot goes the horn...

[optimensch]

"That is what its all about the Warby Parker listing and not the Google being the biggest, we all know that"

Google makes a profitable cut on every ad, every click for eyewear (and everything else). All the noise you mention about CC, WP and all the so-successful money losing onliners - all that noise creates dollar bills for google. Google is worth 10X more than Essilor AND Luxottica.....COMBINED.

All the millions that CC and WP spend on adverstising, all the losses booked by CC which E is now paying MULTIPLES for, is actually all for google. All of it.
And all the discussion about how wonderful CC and WP are, how they will eat all our lunches is really very provincial-thinking, its so local and small. The big picture is google, and how google is revolutionizing retail and advertising. It is democratizing as well, anyone can buy google adwords in their local market, or world wide, and use the web to promote their services and wares.
If you are super bullish on online eyewear and how it is going to take over our industry completely (which I seriously doubt), then buy GOOGLE shares. Not E or L .

let's say 0.75% of googles revenue is from eyewear/contact lens advertising. sort of a wild guess. That means revenue of 440$million USD. with ebitda of 30% that is 130$million. How many pure optical companies on EARTH have that kind of ebitda??

[Chris Ryser]

I believe you still have not understood how the internet advertising works, and I have tried to get you to understand that Google is only a good as there are websites to list. If they would suddenly disapear the GOOGLE would disapear into thin air and make no more money.

If a website is new and gets no hits, it will not be listed on Google and then starts getting listings at the end of the line. Therefore each website does its best to make it to top ranks on GOOGLE because people go on a search and maybe look into 2-3 pages of GOOGLE results maximum.

The more hits a website gets the better they rank on GOOGLE and on Alexa and get listed and ranks in the top classes and you can jusge on your own if a website is successfull or not. There are some non selling and non money making sites on thye net that have top rankings. It has all to do with how and with what they atttract the lookers.

In 2004 it was suggested on OptiBoard to have an Optical Website listing. I made the effort with the help of many OptiBoard members at that time to construct such a site and have kept it up ever since, as time allows me to do that. It now contains over 900 optical websites in order of their ranking. It is now 10 years that it is up and running and it has never cost a cent nor made any money, but has seen many hits over the years.

There is also a section dealing with on-line opticals and WARBY PARKER is right now on top of that list, ahead of everybody else. So it seems to be the most interesting site in that section.

[HindSight2020]

By using the old former Imperial Optical system and letting CC continue their successful way of loosing money while selling tons of glasses, which the conventional retailers will NOT sell. CC will also become a superb tax write off for E.

In simple terms, they will instruct the new aqusition to drop all purchasing from outside their E owned companies to a maximum of around 15%. Any monetary amount over this limit will be directly deducted from any monetary bonuses arranged with and for management.
This way E will now become the majority supplier of frames and lenses and all other supplies needed to make top quality glasses, purchased from their own inventory of suppliers, and make their margin at the front end by increasing quantities sold.

Advertising for Essilor products will not have to be changed, all they have to change is the brand names of lens frames and coating types that are already successful on the conventional retail, market and advertis and sell them as similar to .............so and so.

CC probably will not change much as many think, but Essilor will be the winner at the end, but also your biggest competitor while many of you just ignore ....................and "snore" and hope that this is only happening in dreamland.

And do not forget that WARBY PARKER has now the most successful website in the Optical worldwide and just about must be on Essilors wanted next list.

I've been predicting this acquisition for the last couple of years. While everyone snickered in disagreement with my posts, it eventually transpired. Now ECP's need to get their heads out of the air blower and boycott the Evil E empire. If you don't strategically align with a supplier that will actually support you, you will be dead in the water.

Purchasing from E provides a very accurate snapshot of your entire practice's revenue, volume and local market share, which in turn translates into a devious game plan on what tools/resources they will need to win your patient base and erode your practice to the point of bankruptcy.

[Chris Ryser]

Now ECP's need to get their heads out of the air blower and boycott the Evil E empire. If you don't strategically align with a supplier that will actually support you, you will be dead in the water.

Purchasing from E provides a very accurate snapshot of your entire practice's revenue, volume and local market share, which in turn translates into a devious game plan on what tools/resources they will need to win your patient base and erode your practice to the point of bankruptcy.

Very well said .............................

However there are very few labs left in all of Canada that have no direct connection to E and they know that too.

On the political scene they also have some real big influence in the schools of optometry and the opticians associations.

They are already fully self supporting from manufacturing to retail and practice the same in other countries.

OptiBoard members do not much participate in these discussion, but the number of views is always going up fast. Maybe the message sinks in anyhow.

[HindSight2020]

Very well said .............................

However there are very few labs left in all of Canada that have no direct connection to E and they know that too.

On the political scene they also have some real big influence in the schools of optometry and the opticians associations.

They are already fully self supporting from manufacturing to retail and practice the same in other countries.

OptiBoard members do not much participate in these discussion, but the number of views is always going up fast. Maybe the message sinks in anyhow.

There are still some labs not affiliated with E in any way, and these are the ones independents need to migrate to. E only supports the associations, colleges and universities for the simple fact they can control the entire chain, not becuase they give a hoot about the quality of education to ECP's or students.

If they truly cared about independents, they wouldn't be competing at the same level under various alias companies owned by them.

As to your point Chris about the many lurkers and lack of posts, it is an absolute shame that these people don't speak up and get involved rather than be sitting ducks and watch themselves continue to erode. Pathetic really.

[optimensch]

I think the 2 giants E and L will begin to run out of headroom for growth, because the barriers to entry in optical are quite low. They can't keep paying exorbitant prices every time an upstart comes along. For now anyway, there are still plenty of upstarts and venture capital to fund them.
I totally agree with Hindsight that independents need to get away from these behemoths, especially E.
As global sourcing becomes more democratized and doing business directly with factories (in asia and elsewhere) becomes easier for independents, there is no reason we can't easily compete. Even if online grows to 15%, it means 85% are still going to real stores for real service.

[Stan Tabor]

I think the 2 giants E and L will begin to run out of headroom for growth, because the barriers to entry in optical are quite low. They can't keep paying exorbitant prices every time an upstart comes along. For now anyway, there are still plenty of upstarts and venture capital to fund them.
I totally agree with Hindsight that independents need to get away from these behemoths, especially E.
As global sourcing becomes more democratized and doing business directly with factories (in asia and elsewhere) becomes easier for independents, there is no reason we can't easily compete. Even if online grows to 15%, it means 85% are still going to real stores for real service.

I agree independents can compete. Online going to 15% represents a five fold growth as it is now around 3%. B to C ecommerce has been around for 15 years and the fact it has only reached 3% shows the public is slow to buy in. The bigger threat comes from a retailer that builds a better mouse trap like Specsavers did in the UK. If Specsavers came to the US with some financial backing, that could be a game changer.

Regarding E and L and growth, there is still China, Brazil, India and other developing economies that desire the products from E and L. There is also room for growth through acquisition and licensing. There is a long way to go before consolidation is complete.

The barrier to entry into optical is low. However the barrier of entry to create brands that challenge Lux and Essilor is very very high. Luxottica owns most of the most desirable fashion brands and the leading optical brands. Consumers still want their ray bans and oakleys. They are the best at marketing and the best at distribution. Ditto for Essilor. I hear and see transitions and crizal ads and customers have some knowledge of their brands relative to their competition. With Foster Grant, E dominates the drugstore market.

[optimensch]

"The barrier to entry into optical is low. However the barrier of entry to create brands that challenge Lux and Essilor is very very high. Luxottica owns most of the most desirable fashion brands and the leading optical brands. Consumers still want their ray bans and oakleys."
Stan, it is pretty clear by now that brands really matter a lot for plano sun. However for optical frames and lenses, brands matter much much less. It is the rare client who insists on a particular name brand lens or name brand frame. This is how "warby parker" could rise from nowhere, and we all can sell "boutique" brands of frames in our shops that have near-zero brand awareness. It is not that difficult to propose "HD" lenses, with "German" optical designs etc.... or frames from some French optician designer (how many awesome boutique brands arose from French opticians?) who no one has ever heard of. People want to hear a good story, get good quality, and have faith that you are proposing good merchandise and good service to them. Many, maybe MOST, customers want to know what WE are excited about in our shops. You do NOT need to buy from E and L in order to do this. Lux has an edge with all their brands for sure, but we are still in business here and selling plenty of stuff that isn't purchased from them.
I also agree that online is not likely to get to 15% market share in eyewear, however some folks see it heading there, possibly with the whole pie getting bigger as well. I believe it will top out at a lower (1/2?)_ number.

[HindSight2020]

Naturally those two giants have an enormous B2C marketing budget. As far as lenses go, when a patient asks for craze-all or vari-lack, I simply say I can provide to you something even better at the same cost or even less. Bingo, the deal gets done.

Patients truly do rely on a professional's advice and opinion. Steering them into a better product does your patient and your practice huge justice!

[Chris Ryser]

...............................As far as lenses go, when a patient asks for craze-all or vari-lack, I simply say I can provide to you something even better at the same cost or even less. Bingo, the deal gets done.

That has always worked ................you'r the specialist and should know.

[Stan Tabor]

Stan, it is pretty clear by now that brands really matter a lot for plano sun. However for optical frames and lenses, brands matter much much less. It is the rare client who insists on a particular name brand lens or name brand frame. This is how "warby parker" could rise from nowhere, and we all can sell "boutique" brands of frames in our shops that have near-zero brand awareness. It is not that difficult to propose "HD" lenses, with "German" optical designs etc.... or frames from some French optician designer (how many awesome boutique brands arose from French opticians?) who no one has ever heard of. People want to hear a good story, get good quality, and have faith that you are proposing good merchandise and good service to them. Many, maybe MOST, customers want to know what WE are excited about in our shops. You do NOT need to buy from E and L in order to do this. Lux has an edge with all their brands for sure, but we are still in business here and selling plenty of stuff that isn't purchased from them.
I also agree that online is not likely to get to 15% market share in eyewear, however some folks see it heading there, possibly with the whole pie getting bigger as well. I believe it will top out at a lower (1/2?)_ number.

Mensch- I agree with you except I believe you may be understating how many people still want a brand. My experience has been there are too many people who want Rx's in Oakleys, Ray ban, Chanel, Prada, Oliver Peoples, etc. They don't understand you can get as good or better quality for less.

Warby Parker beat the odds by creating a niche brand for hipsters and wannabe hipsters. Free early publicity, slick marketing based upon "charitable giving" and excellent timing played a big factory. Who knows if they are profitable or not. They are tight lipped with this info.

I agree 100% that there is a market for well made premium frames with a story to tell. I believe you posted that you went to Mido. I am sure you saw a few dozens of lines that would fit this bill. I believe many independents fail to appreciate the potential to provide truly unique products. An enthusiastic optician who believes in and can explain the product can go a long way...Too many are lazy and just push the lux frames.