Essilor is entering into the retail market
It is said that Essilor has been seeking cooperation with sunglass specialist FGXI for several weeks. Two weeks ago, Essilor submitted a conditional $18-a-share offer but FGXI was said to want $23 a share from Essilor. A fact is that the two giants are under close contact. Covering a wide range of business in the optical industry, FGXI has been the cooperative target of Essilor. This signifies an obvious move in the Essilor that the company wants to set up a “direct the consumer” avenue.
Focusing on the markets in North America and the United Kingdom, FGX International, Inc. designs and markets non-prescription reading glasses, sunglasses and costume jewelry. Headquartered in Smithfield, Rhode Island, FGXI has many trademarks, including FosterGrant, Magnivision, Anarchy, Angel, Gargoyles, Hyperflexx and Redi-Readers. In addition, the company also keeps brand names including Ironman Triathlon, Levi Strauss Signature, BodyGlove, C9 by champion and Daytona International Speedway to manufacture, market, distribute and sell its products. FGXI maintains distribution channels with mass merchandisers, chain drugstores, chain grocery stores, specialty retailers, variety stores, ophthalmic retailers as well as mid-tier department stores.
The potential cooperation between Essilor and FGXI obviously shows Essilor’s attempt to go directly to consumers. This is absolutely not the traditional business model of Essilor. Currently, Essilor maintains a large network of eye care practitioners who are responsible for distributing Essilor products. During the past several years, sales at Essilor were on the increase that the sales number reached $209 million in 2006, $240.5 million in 2007 and approximately $255 million in 2008. A further step in Essilor is that the company is still expanding internationally by setting up offices in New York, Toronto, Stoke-on-Trent, England, Mexico City and Shenzhen, China.
Essilor is now moving into the retail segment through its potential partner FGXI. This significant move in Essilor is estimated to trigger some changes in the optical retail industry. Further actions of Essilor may include demise of the independent ECPs and labs.