Particularly I'm interested in Sears Optical. I see another popular thread with info regarding BJ's going to US Vision. The Sears host itself seems to be on a steady decline. I also know that the "Sears Essential" Opticals were all closed; as well as many free-standing stores. Does anyone know anything about Luxottica's strategy? The many changes made this quarter (Q1 '08) make me think something is in the works.
Originally Posted by bender
The many changes made this quarter (Q1 '08) make me think something is in the works.
Something is always in the works with Luxotticca. They would not be the successful, industry mover and shaker if they didn't always have something in the works. I think that we as an industry have only begun to see the things that they have in the works. I believe that they have a solid business plan that is both proactive and reactive to the business climate of anywhere they do business. If a section of the business is not producing, they will eliminate that deadwood.
Don't worry, they have something in the works alright........and I think the goal is total market domination from manufacture to wholesale, to retail and beyond. They have only begun the domination on the frame and retail arena. I truly think that the lens manufacture and distribution will be the next big hurdle that they will more than likely easily sail over.
LC has its eyes on owning their own lens manf lab.
IMHO, I think they are watching Essilor pick off all the independent labs, and when they are all done scooping them up, you better believe Lux is gonna coming knocking on their door.
What better way to dominate the market then the "Combination" of two big giants. Worse comes to worse, they could always buy out Younger Optics or another smaller lab, but I doubt they want to compete with Essilor. Why compete when you can simply buy them out ;-)
Why compete when you can simply buy them out
That is not only a thought...............that is a fact, just follow the path of history and you can see the development. It is not only Lux doing it, Essilor and Zeiss have their own plans towards total domination.
They have all chosen the USA because there is no strong organization to counter their moves and the never wil be one. Strong corporations can overrule all habits and change publics thinking.
It will be interesting to know who will be the finalist that gobbles up the last one left.
One word: FezzJohns
I was having this conversation with someone the other day and they pointed out to me that they would not need to buy any labs. With all the central labs they have to do the work of their existing retail stores they are already one of the largest lab systems in the nation.
Again, I agree. But Lux does not manufacture the lenses. If they buy out Essilor or the like, their lens price goes down from their wholesale to cost of manufacturing their own lenses.
While I am sure Lux only pays a marginal amount of the wholesale that independents face, even if they save .50 per lens, think how that adds up over a year.
First off!! Everything Luxottica buys or does revolves around selling frames. Buying a lens company does not save them 1 cent. If they sold lenses to Lescrafters for less money then the lens side would just make less. So they would gain nothing by doing this. BUT I have no inside info that proves this!!! (Disclaimer) It would make more sense for a lens company that does not sell to Lenscrafter to buy Luxottica! Right now it looks like Lux is trying to buy out the middle to high end chains stores and then close some of them down. This saves on overhead and enables them to raise prices! But this is just my view!!!!!!
Second I read this (Below) a few weeks back and have been waiting for the uprise! What gives? I just hope the do more buying and less opening!
Safilo Group to Open Retail Network
February 07, 2008
Milan, Italy-based Italian eyewear manufacturer Safilo Group SpA, plans to launch its own chain of retail stores, according to The Wall Street Journal. The company recently acquired two eyewear chains--Just Spectacles in Australia and Sunglass Island in Mexico--for about $41.5 million. In an interview, Claudio Gottardi, CEO of the company, said Safilo will open a network of prescription eyewear boutiques this year in countries such as China. In addition to the new chain, Safilo will also roll out Solstice stores, a 110-store chain in the United States, to other countries. For the next five years, Gottardi said the company will open or buy 100 to 200 stores a year. The company has not yet revealed the name of its new chain. "The majority of our future expansion will come from building our own stores under our own name," Gottardi said.
Agreed, Optirep. I think we should all stop buying Safilo just like we stopped buying Lux. Or did we?
All I know is that in my neck of the woods, Lux used to call on everyone and have a large percent of board space. No one has seen a Lux rep in a couple of years - or needed to.
If you think that Lux could buy Essilor, I think you overestimate them. Or underestimate Essilor.
I agree w/ ADO. There is no need for Lux to buy wholesale labs, they already own what the need. Lux could buy Younger but I think Vision-Ease is a more logical choice. They already use their progressives, polarized and photochromic lenses. Although recently I think they have begun using more Essilor progressives. Could be just a ploy to starve Vision-Ease to the point of looking for a buyer.
When it happens, remember you heard it here first. Kinda like Chris predicting the current economic downturn back in 1993.
Optirep, With the exception of plano sunwear, what good are the frames without lenses to put into them?
As we all know, the markup on lenses is MUCH, MUCH more than that of the frames, so why manufacture just the frames, and not get a piece of the other half?
Also, I don't think the argument holds that if they bought out a lab manufacturer, they wouldn't save even 1 cent on the lenses. Of course they would. They would continue to sell at a wholesale price, and money would literally transfer from LC to the Lens manf. side of Lux, where as now, the money is going to Essilor. LC is now pushing the Accolade in most of their stores. Additionally, Lux would gain profit from the dispensaries that use Essilor product.
They are using more and more Essilor product, why you ask . . . Is is because it is simply the best product and Lux Must have it? Or is it so that Lux can work with it, become familiar with it, and roll more of it out into their stores, so that when they take over . . . . . .
As a disclaimer, I am a current Lux Employee and get to pick the brains of GM's, Regional Managers, and VP's of Lux, as we house some of their offices ;-) So I will state again, IMHO, Lux has their eye Essilor
Last edited by Crazy-bout-Optics; 02-29-2008 at 11:22 PM. Reason: Left out disclaimer ;-)
Lux would be interested in purchasing a lens company if it:
1.) provided some synergistic effect for Luxottica
2.) was a good business to buy: i.e. a profit giant, etc.
Obviously, #2 is met. Lux could buy a shoestore, again, if it wanted to. The Del V's do clothing, etc. Why NOT ophthalmic lenses, or microchips?
As to #1, what positive would there be? Sure, a lower COGS on lenses, although I'm sure they negotiate a great deal from lens suppliers, now.
Are multiple Essilor labs in the US a strategic benefit? Not to Lux Retail; why do they need hundreds of little labs when they could purchase/create several large regional labs for freeform, etc?
I guess if Lux wants to overtake ALL aspects of the U.S. optical industry, they would want a bagful of formerly independent labs, but to what end?
There's also the not small aspect of whether Essilor is public or private. Anyone know? The Frenchies may not be keen on a flagship company being bought out by the Italians...
I'm not buying it, personally. But I've been very wrong before on the Oakley thing.
So how is it that Luxottica can be stopped or derailed in their process. If we look looooooong term and think about the fact that Lux will dominate the industry not only on the manufacturing, processing and retailing end of the business but also on a marketing side. With loads of cash, i am sure lux will have the latest technology in their stores i.e. vitrual simulators, latest gadgets and exclusiveness for their brands.
When you look at how in history some of the biggest stores, conglomerates, countries, leaders have fallen, it is because they lose sight of the basic fundamentals of their business. Luxottica is in the business of selling eyeglasses to customers. Customers return to lenscrafters over and over because they are satisfied with their purchase. (I know i have had tons of people complain about their glasses and bad service from LC, but leave that aside). As long as customers are happy, lux will keep on growing. If you want to start bringing down the empire that LC thinks that it is, we (independant opticians, indie frame manu. and suppliers) need to begin to lay the foundation for this now.
LC is not a crown corporation or a monster unto itself, it is a company that is running on a business model. If we wanted to, we could significantly chop LC down in half within weeks. It is not that we want to close down LC, it that we want fairer practices by them.
I apologize for ths long rant, but it is something that I often think about and want people to understand the power of one.
Essilor is publicly traded on the CAC 40. It's market cap as of 7/31/07 (my latest figures) was €7.045 Billion. It's only larger now, and still growing.
I just read that Lux's market cap is $7.4B. You guys can convert better than me.
The numbers don't work for Lux buying Essilor. They could swallow up Vision-Ease or Younger with this month's profits. But since they have gotten away from the Illumina and LifeRx - not much synergy there. And Younger doesn't have a PAL that Lux uses.
In the last edition of Vision Monday, one of the Lux execs (I think Kerry Bradley) basically said that they are committed to the Sears brand and have no plans on letting the contract lapse, as will happen with BJ's.Particularly I'm interested in Sears Optical. I see another popular thread with info regarding BJ's going to US Vision. The Sears host itself seems to be on a steady decline. I also know that the "Sears Essential" Opticals were all closed; as well as many free-standing stores. Does anyone know anything about Luxottica's strategy? The many changes made this quarter (Q1 '08) make me think something is in the works.
They have already swallowed Dr. Golden's place maybe they will look at his new venture. ;)
But Co_Mac, actually keeping up to date on industry news means we can't spin bizarre conspiracy theories.
:D LOL yea...
I was told by a regional from another brand AND a Dr. that works for U.S. Vision that Sears is not renewing the lease with Lux and that US Vision is taking over and closing any stores that dont make $ Has anyone else heard any news about that? I would not think it was adecision made by Lux b/c they just spent millions putting in a new computer system. Maybe Sears/ Kmart doesn't want to do business with them anymore. All just speculation but did here it from two pretty good sources. The regional manager got an email about it from her Home office
:drop:
That would not surprise me! I don't think they are realizing the type of revenue they are used to. THE LUX stores for the most part are all million dollar stores where I think most Sears stores are not.
You'd be surprised. I managed a Sears for over a year, and we were NOT a large store. We did over half a mill a year. The other Store in town, not 15 minutes away did around $800k, also not a large store compared to those in Ontario. Sears isn't going anywhere, it's a lux dumping ground. Every frame in their stores are old, discontinued, or GOING to be discontinued. It's a great place for lux to get rid of their extra stock at a high price. Want an Ovation? $380 please! Believe me, Sears isn't going away any time soon.
But they might not have a choice, if Sears decides to switch over to US Vision what could Lux do about it? I just find it hard to believe that it is a rumor because of who I heard it from. The only reason I care besides the fact it would make me happy to see Lux take a hard knock is that I have a lot of friends that work there.
Depends on how badly the want it, I suppose. If Sears says no to a contract renewal, no, there isn't much they can do, other than offer more money. I'd think it'd be a pretty tough transition though. They'd have to gut ALL the stores, since all the displays, furniture, equpiment etc belong to Lux... unless it's in their contract, all the patient information would stay with Lux, so all previous customer data would be gone. Pretty much anyone with a current pair of glasses from Sears would be screwed, as US Vision wouldn't be able to get parts for any of their Discontinued frames... basicly it'd be starting from scratch, and I think it'd **** off a lot of Sears customers. That's not in Sears' best intrest... but we'll see, I guess :)
Actually friends have told me that average gross in US is roughly about 400 to
500k and that is about a third of what a normal LUX store does! So I guess only time will tell!
With the amount of money Luxottica is currently investing in Sears Optical departments I can't see them selling that brand off. Sears Optical is a strong contributor to Luxottica's bottom line. Yes, they are not renewing the lease with BJ's Optical. I believe US Vision (JC Penneys Optical) will now own the BJ optical departments.
Are they really investing a lot of money? Just asking! ;)
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