LensCrafters 2005 Annual Report Download - page 29

> 28 | ANNUAL REPORT 2005
Regarding Pearle Vision franchising, Luxottica Group has now become the preferred supplier to these
stores not only thanks to the strength of its brands and the quality of its products but also, indeed above
all, because of the new and much improved services (Franchise Advantage Program) that it makes
available to franchisees. The program features marketing solutions, preferential pricing and savings on
certain other categories of products (lenses, lab services, contact lenses, accessories), all of which with
a significantly higher level of service and merchandising support.
Licensed Brands
Luxottica Group is today the leading operator of licensed brand stores in North America, with a network,
at the end of 2005, of 1,349 locations in Sears, Target and BJ’s Wholesale Club department stores. In
the United States, in particular, Sears Optical has 880 locations, Target Optical 246 stores and BJ’s
Optical 143. In Canada, Sears Optical Canada operates 80 locations.
Each of these brands, which offer consumers the convenience of taking care of their optical needs where
they already regularly shop, has a precise positioning within the market. Sears, the department store par
excellence with a vast and heterogeneous customer base, in 2005 launched a nationwide TV campaign
in the United States - “Life Enhancing” - to reinforce the positioning of the Sears Optical brand.
Target Optical, which appeals to fashion-oriented customers who enjoy novelty, continued to focus its offering
on fashion eyewear that’s also moderately priced. Target Optical worked hard to give store visuals a more
integrated look and concentrated advertising on Sunday paper inserts and a number of in-store initiatives.
BJ’s Optical continued to offer BJ Wholesale Club members high quality at very competitive prices.
In general, 2005 was another year in which partnership with these leading department store retail brands
enabled Luxottica Group to boost sales and distribution to the significant department store customer
base. Luxottica Group products accounted for 45% of total sales through this channel.
Lens finishing laboratories
Luxottica Group manages one of the largest networks of optical manufacturing labs in the United States,
with eight central labs nationwide and close to 900 lens finishing labs, mainly within LensCrafters stores.
To support the growth in sales of anti-glare lenses, in 2005 a dedicated unit was added to the Dallas
central lab, while anti-glare lens production at the Memphis facility reached 50% of total output. The
Memphis facility was also reconfigured with advanced production technology to meet growing demand
and maintain a constant focus on quality and customer service.
In-store LensCrafters labs allow customers to receive the eyewear they purchased with fast turnaround,
even in one hour. In 2005, Luxottica successfully increased utilization of LensCrafters’ lab capacity by
having them process increasing volumes of glasses for Pearle Vision stores as well. This strategy will be
pursued further in 2006.
SUN
Sunglass Hut
Sunglass Hut is the largest and most important specialty sun retailer in North America and the world, with
a total of 1,849 stores (1,557 in North America, 182 in Australia, New Zealand and Singapore, and 110 in
Europe). In the eyes of consumers Sunglass Hut increasingly represents fashion and the latest trends.
First established in 1971, initially only inside department stores, Sunglass Hut has always cultivated a