LensCrafters 2008 Annual Report Download - page 27

Download and view the complete annual report

Please find page 27 of the 2008 LensCrafters annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

25 <
OPTICAL RETAIL
Luxottica Group’s optical retail operations are through leading brands such as LensCrafters and Pearle
Vision, leaders in North America, and OPSM, Laubman & Pank and Budget Eyewear, which are active
throughout Australia and New Zealand. The Group also has a major retail presence in China, where it is a
top operator in the premium eyewear market with LensCrafters. Due to the fragmented nature of the
European retail market, the Company does not operate optical retail stores in Europe outside of the
United Kingdom, where it recently bought the remaining stake in the David Clulow optical chain, which
sells both prescription and sun products.
As of December 31, 2008, Luxottica’s optical retail business consisted of approximately 3,800 retail
locations globally.
As of December 31, 2008, the Group operated a retail network of 1,136 LensCrafters stores, of which 966
are in North America and the other 170 stores in China. LensCrafters is currently the largest optical retail
chain in North America in terms of sales.
LensCrafters stores offer a wide selection of prescription frames and sunglasses, mostly made by Luxottica,
but also a wide range of lenses and optical products made by other suppliers. Points of sale are normally
in high-traffic commercial malls and shopping centers and have an optometrist (sometimes a Luxottica
employee) so that customers can have eye examinations on site. Most LensCrafters stores in North
America also include a lens finishing laboratory, which dramatically improves the customer service level.
During the last few years, Luxottica has invested in the premium aspects of the LensCrafters brand, adding
additional elements such as an exclusive new store concept now being adopted in store remodeling
across North America, associate training and advertising and marketing, which together represent the
premium brand and future direction of LensCrafters. These new initiatives have also helped increase the
average transaction per customer value, as LensCrafters becomes the retailer of choice for fashionable,
designer prescription frames and sunglasses. The aim of this new focus on prescription frames as fashion
objects and not mere instruments is also to shorten the consumer’s purchase cycle of typically two to three
years.
Luxottica continues to evaluate potential retail expansion opportunities in North America through
acquisition of retail chains and store openings in areas where LensCrafters is not already heavily
represented.
In 2006, Luxottica began to expand the LensCrafters brand in China by rebranding most of its stores there,
which were acquired through the acquisition of three retail chains. As of December 31, 2008, the Company
operated 238 retail stores in China and Hong Kong, of which 170 carry the LensCrafters name while the
others retain their original brand names.
Hong Kong is one of the most significant Chinese luxury markets and is very popular with affluent mainland
Chinese. Launching LensCrafters as a premium brand in Hong Kong was therefore important for increasing
awareness and consumer demand for Luxottica products and services.
With the acquisition of Cole National in October 2004, Luxottica acquired Pearle Vision, one of the largest
optical retail chains in North America after LensCrafters. Although both brands address the mid- to high-
end customer bracket, their positioning 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.
Pearle Vision stores are mostly located in strip malls instead of the conventional malls where most
LensCrafters and Sunglass Hut stores are located.
The successful relaunching of the Pearle Vision brand in 2004 and 2005 was centered on a return to its
original values, which had made Pearle Vision the “Home of Trusted Eyecare” for generations of
Americans. A product mix increasingly geared to high quality has helped restore strong customer
relationships, as has the emphasis on doctors in advertising campaigns. At the same time, a significant
reduction in sales promotions and discounts helped improve the chain’s positioning.
RETAIL
DISTRIBUTION