LensCrafters 2003 Annual Report Download - page 10

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1918
RETAIL
WORLDWIDE PRESENCE
With an eye on expanding its worldwide distribution network, in 2003 Luxottica Group grew its global retail
business by acquiring OPSM Group (“OPSM”), Australia’s leading optical retailer. Following this acquisition, as of
December 31, 2003, Luxottica Group’s retail division operated 3,382 stores in the U.S., Canada, Australia, New
Zealand, Southeast Asia and Europe across three brands: LensCrafters in North America; Sunglass Hut International
in North America, Australia and select European markets; and, OPSM in Australia, New Zealand and Southeast Asia.
During 2003, the Group’s retail division, Luxottica Retail, continued to face challenging economic conditions
including sluggish consumer demand and unfavorable Euro/U.S. Dollar exchange rates. Retail sales for the year were
2,002.3 million, with operating income of 269.8 million, fully reflecting the translation impact of the nearly 17
percent devaluation of the U.S. currency against the Euro, which is Luxottica Group’s reporting currency. For the year,
Luxottica Retail posted a 13.5 percent operating margin, which although lower than the previous year, was still
remarkable in a difficult economic environment. This was achieved mainly by generating additional operating
efficiencies and exercising greater control over costs throughout the Group’s entire retail structure. Results of the
Group’s retail division included the OPSM acquisition, which was consolidated as of August 1, 2003, and one
additional week (1).
OPSM GROUP
OPSM Group, Australia’s leading optical retailer with 464 stores, operates mainly under the brands OPSM,
Laubman & Pank and Budget Eyewear, each targeting a defined market segment. OPSM is also the market leader in
New Zealand with 35 stores, and has a presence in Asia, where it currently operates 76 stores in Hong Kong, 12 in
Singapore and 13 in Malaysia. In all, as of December 31, 2003, OPSM operated 600 stores. OPSM Group is listed on
the Australian Stock Exchange, where it trades under the symbol OPS.
In 2003, OPSM sales continued to show strong same store sales growth. Rollout of a new store concept for
OPSM commenced in early 2003 and will be accelerated in 2004. Currently, 19 stores have undergone refurbishment
and plans are in place to increase the schedule to 40 stores a year. Key features of the new store concept included
(1) The retail division uses a retail calendar year, ending on the Saturday closest to December 31. This calendar results in 52 7-day weeks, or 364 days
per year. Every 5 to 6 years, depending upon Leap Year, there are 53 7-day weeks, or 371 days. As a result, the retail calendar in 2003 included a 53rd
week.