LensCrafters 2006 Annual Report Download - page 30

>30 | ANNUAL REPORT 2006
Lastly, Luxottica Group announced the opening of Sunglass Hut franchise stores in the Middle
East, which is one of the most promising markets for high-end fashion and luxury products,
especially in the Gulf States. Sunglass Hut will operate in major shopping centers, mainly in the
United Arab Emirates and Saudi Arabia. New stores will only carry the Group’s prestige brands
such as Bvlgari, Chanel, Dolce & Gabbana, Prada and Versace, as well as Ray-Ban, the world’s
best-selling sun brand.
OPTICAL
LensCrafters
Eleven years after joining Luxottica Group, LensCrafters is North America’s leading operator in the
fashion and luxury eyewear segment, with 902 stores in the United States and Canada. In 2006,
North American comparable store sales increased well above the chain’s historical average, while
producing higher margins despite LensCrafters’ significant investments in its stores during the year.
These results are due to both the growth trend enjoyed by the mid- to premium segment and the
effectiveness of the strategies the Group has implemented.
Luxottica Group’s plan to strengthen LensCrafters’ high-end positioning, including focusing on
customers interested in premium products, fashion and high-level service, was introduced with the
opening of the flagship store on Fifth Avenue in New York. Inaugurated in April 2006 after a complete
renovation and redesign of the store concept, based on extensive studies and market research, the
new flagship store heralded a new concept and a quantum leap in quality.
Characterized by sophisticated interiors and a high capacity for product personalization, the new
format targets sophisticated consumers who demand high quality of service. This type of
customer is becoming increasingly important, partly due to LensCrafters’ communication
campaign to target American consumers and its 2006 “Make an Appearance” ad campaign
supporting the new store concept.
The opening of the New York flagship store, signaled by a prominent article in The New York Times,
was followed up by the roll out of the new store design to approximately 50 stores across North
America in 2006. LensCrafters’ results from these renovated stores in their first few months, through
the end of 2006, were very encouraging. In fact, comparable store sales for these remodeled stores
have been above the already high average.
Avery strong performance was also seen in stores that had yet to be renovated. These stores
continue to benefit from the Group’s ongoing investment in its store base.
With a North American market firmly focused on rediscovering luxury and fashion products and
related values, LensCrafters’ revamping of its brand image in 2005 along with its new store concept
introduced in 2006 have enabled LensCrafters to continue to grow by leveraging the Group’s high-
end brands. The introduction of the Dolce & Gabbana collections, followed by the launch of the new
Burberry and Polo Ralph Lauren lines, will continue to strengthen the chain’s top-range positioning.
Sales of prescription frames and sunglasses produced by Luxottica Group, particularly its fashion
and luxury brands, accounted for around 72% of total sales in 2006.
Lenses are another important dimension of LensCrafters’ expertise. Sales of anti-reflective lenses grew
24% in 2006. In late summer 2006, LensCrafters introduced FeatherWates® Complete Lenses made
with Scotchgard™ Protector, an innovative product that is resistant to water, dirt and dust and does not
require frequent cleaning. This product accounted for 64% of total anti-glare lens sales in 2006.