LensCrafters 2006 Annual Report Download - page 31

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During 2006, lenscrafters.com was relaunched, reflecting a more fashion-oriented look, in keeping
with the new store concept, and with a stronger focus on highlighting designer products and fashion
expertise. The site also allows customers to schedule eye exams online.
2006 was a very positive year for LensCrafters in North America. The breadth of its investments in
store remodeling, products and its website enabled LensCrafters to capitalize on favorable trends
in the North American market and to cultivate the organic growth potential on which future
development initiatives will concentrate.
In China and Hong Kong, 2006 was a year of reorganization and extension of the retail network.
After the 2005 acquisition of the Xueliang Optical and Ming Long Optical chains, in November
2006 Luxottica Group acquired Modern Sight Optics, a leading chain in the premium prescription
frame segment operating 28 stores in Shanghai. By the end of the year, the Group’s retail network
in China and Hong Kong included around 274 stores, making it China’s leading optical and one
of its biggest luxury retailers.
With the September opening of LensCrafters’ new flagship store in Beijing’s Oriental Plaza, an icon
of fashion and shopping, Luxottica Group took the first step towards making the LensCrafters brand
asynonym for prestige eyewear in China. LensCrafters offers the best of «Made in Italy» eyewear,
an extraordinary level of customer service and the most advanced technology in the industry, thus
positioning itself as the first real eyewear “boutique” in the Chinese market and serving as a
benchmark for premium eyewear products.
Under this program, 75 stores, 55 in Hong Kong and 20 in China, were rebranded in 2006 to the
LensCrafters brand, alongside those of the Xueliang, Modern Sight and Ming Long chains. An
objective for 2007 is to significantly increase the number of LensCrafters stores in the Chinese
market, both by converting existing stores and opening new stores.
In 2006, LensCrafters in China reported improved sales, and contributed, along with a general
increase in the level of the brands, to the Group’s double-digit growth rate for stores in China and
Hong Kong.
Luxottica Group’s focus in China is for the long-term, and it is strategically making its stores
accessible to all consumers seeking a premium service experience and brands. At present, the
Group is growing mainly in the eastern part of the country, where GDP is rising twice as fast as in
the rest of China. The Group’s product lines will vary by segment as the market continues to evolve
and as more of the population reaches middle-class status.
The format of the new LensCrafters stores aids in assessing the various brands across different
segments of the market and analyzing relative performance and demand. The optical segment will
continue to grow in line with the offering of fashion brands and products. The sun segment is
another business opportunity as increasing numbers of Chinese view sunglasses as an important
part of their wardrobe.
Store performance was particularly strong in Hong Kong, where all of the Group’s optical stores
have been converted to the LensCrafters brand. LensCrafters stores reported high sales
performance in line with that of stores in the United States and Australia. Luxottica Group’s premium
brands, the high profile of its stores and its high level of service quality have been a great success,
as reflected by its growing market share in Hong Kong.