LensCrafters 2006 Annual Report Download - page 32

>32 | ANNUAL REPORT 2006
Pearle Vision
2006 marked a definitive return to profitability at Pearle Vision, which was acquired by Luxottica
Group through the Cole National transaction in 2004. Its network consists of 840 stores, of which
423 are company owned in the United States, Canada and Puerto Rico, and 417 are franchise
stores in the United States and the Caribbean.
In North America, Pearle Vision is the second largest optical chain after LensCrafters. Although both
brands address the mid- to high-end customer bracket, their positioning in practice is
complementary. Pearle Vision focuses on the factors that made the brand a success: customers’
trust in the doctor’s experience and the quality of service they receive.
The powerful relaunching of the Pearle Vision brand by Luxottica Group over the last two years was
centered on a return to its original values, which had made Pearle Vision a byword for generations
of Americans, their “Home of Trusted Eyecare.”
After five quarters with positive comparable store sales results and a significant and structurally solid
return to profitability,Pearle Vision is producing the desired results. A product mix increasingly
geared to premium, high value-added products has helped restore strong customer relationships,
as have efforts to portray doctors in various advertising campaigns. At the same time, a significant
reduction in promotions helped improve the positioning of the stores and consumer perceptions,
resulting in increasing profitability.
Sales of the Group’s products at Pearle Vision stores enjoyed strong growth, reaching nearly 50%
of total sales in 2006. Ray-Ban, Prada, Brooks Brothers and Versace were some of the better-
selling brands.
Lastly, to centralize services and achieve economies of scale, all in-store labs were closed, and their work
was transferred to nearby LensCrafters’ labs or to the Group’s nine large central lens finishing facilities.
2006 was a year of consolidation, building the foundation for solid, profitable growth in the future,
and starting a program to add new stores. In Canada, a market with huge potential, Luxottica
Group’s acquisition of Shoppers Optical gives it a good position and favorable geographical
distribution. With 74 stores being rebranded to Pearle Vision, the Group now has 109 Pearle Vision
stores in Canada.
While 2006 was a year of growth in the Canadian market, expansion in the United States is still a
priority.This market offers a wealth of opportunities, and extending the franchising business will be
akey factor for growth in the coming years.
Pearle Vision’s franchises are increasingly turning to Luxottica Group as their preferred supplier, not
only due to the strength of its brands and the quality of its products, but also because of the new
and much improved services of the Franchise Advantage Program. This program, which is available
to franchisees, features marketing solutions, preferential pricing and savings on selected categories
of products, including lenses, lab services, contact lenses and accessories, all of which are
provided with a high level of service and merchandising support.
Licensed Brands
Luxottica Group is the leading operator of licensed brand stores in the United States and Canada,
with a network of 1,358 locations in Sears, Target and BJ’s Wholesale at the end of 2006.