Life is good, especially if you're a dispenser of high-end optical products. Most any purveyor of high-priced frames will tell you that 1999 was an excellent year for business and that sales are expected to increase.

"Business is very, very good," says Bob Heller, O.D., owner of the two-location Classical Eye high-end optical shops in San Diego. "There are big increases every month. This is a result of multiple factors: The economy; the emergence of designer eyewear and high-end goods; and the acceptance of all of the above on the part of the consumer. We [high-end merchants] are all getting better at it and are thinking more in terms of merchandising rather than in terms of dealing with this as an optical apparatus."

As others, including independents and chains, see the success of the high-end market, many are starting to dabble in the sales of luxury goods themselves in hopes of catching the wave. But many high-end experts warn that the old adage of "you can't be all things to all people" holds true in this case. Many say customers prefer to shop for high-end goods in a shop that specializes in--and has a great knowledge of--this special product category.

"Business is strong right now," says Kevin Hershey of the Spectacle Shoppe in San Francisco. "A lot of people see this and want to do high end too, but you must have a lot of know-how. You have to deal with a lot of demanding people and you often have to be able to pull a rabbit out of your hat. You have to be a good businessperson, a good lab technician, and good with your hands."

While many dispensers of more moderate pricepoint merchandise may wish to enter the high-end arena, veterans warn that it is important to try to stay focused. With this in mind, it may be difficult but certainly possible to shift your entire assortment upwards.

"When we were first in business, $75 to $150 was our top-end," says Ron Hawkins, O.D., owner of Optiks in Bloomington, Ind., who now sells product in the $200 to $600 range. "But we made the switch."

THE DRIVING FORCE

If business is this good, the situation then begs the question: What is actually driving sales? Unequivocally, the answer is "names."

"Name product is driving business," says Marvin Freeman, owner of seven optical shops in Las Vegas (including Davante, Dolce, Lunnettes at Paris, Monte Carlo, and The Rio). "This year we will be carrying two of the biggest names to be released recently--Chanel and Prada. We bought a lot of pieces for all our stores."

Many say the real boom today is with lines that have both strong names and good product. "If you asked me three years ago what was driving high-end business, it would be a different answer," adds Hawkins, who says his store experienced a 35 percent increase in sales in 1999. "When we put in Oliver Peoples, that name sold a lot of glasses. Then we put in Air Titanium and people didn't care about the name, they just loved the design and the idea of titanium product. Today, we have put in Lunor and that line has a charismatic name and image as well as the product to stand behind it...and it immediately went to number one." He also notes that while the name is a nice bonus, people will be more drawn to and spend more money on a well-designed, well-made frame.

Hawkins also says that another factor driving high-end business is the proliferation of available product that is on the edge of funky but is also wearable. "We use a tagline that says we are 'The mix of art, fashion and function.' It's our mission statement. The lines we carry have to have that same attitude."

PRODUCT OVERLOAD

Given the success of high-priced optical frames at retail, not only have many dispensers begun to dabble in the business, but suppliers too are launching more product in this area. Thus, according to most dispensers interviewed, there is an overflow of available merchandise on the market.

"There are too many lines out there," says Freeman. "We get so many calls from different suppliers. But you have to go with the companies with which you have the best relationships."

"It's overwhelming," adds Heller on the amount of high-end eyewear in the market from which to choose. "But we are trying to hone our collection of frames to get the best of what's coming down the pike. The high-end consumer is someone who's knowledgeable and comes into our shop five to six times a year to check out what's new. We have to offer them the right product mix. We are constantly reviewing what's new and what's working. I think that's part of being successful with high-end."

THE DEEP END

Honing in on the right product for the store's customers is crucial to creating a saleable assortment. Additionally, however, many say they choose to merchandise product "narrow and deep," meaning they buy into fewer lines, but stock a lot of product from each one.

"We carry a lot of merchandise," says Heller. "And if I go into a line, I go into it deep. We will put at least 50 pieces in from each line." He also notes that the Classical Eye carries about 30 to 35 lines in the larger store (which is 4,000 square feet) and about 18 to 22 lines in the smaller location (about 1,500 square feet).

At Art of Optics in Aspen, Colo., manager Brett Hutchinson carries about 11 to 15 lines and says, "We go pretty deep into the lines. You can't carry one or two styles from different lines--no one will be impacted.."

Gloria Ellis, who owns the five-store Miami-based Optical Elements high-end business with her husband Scott, also says they go deep into each line they carry. With this strategy there is much more selection and availability of a variety of colors in those styles. For example, in the Bulgari and Boucheron lines, they carry at least four frames of the same style--one clear, one sunglass, one in gold, and one in silver. In the Morgenthal-Frederics line they stock six colors of each style frame.

"We used to employ the other concept of wide and narrow in our assortment," she says. "This is far better."

In addition to greater depth in the product lines carried, most point out that it is important to have some lines that are exclusive to your area. This ensures that the customer will view your selection as unique and worth the extra cost. "We carry about 90 lines and almost 5,000 frames in our flagship store," says Josh Josephson, owner Josephson Opticians, which includes seven stores in Toronto.

"We carry every exclusive line that's out there. And we carry them in depth. We look at the cost of investing in a deep assortment of exclusive product as a promotional expense like marketing or sales or advertising."

However, a few (especially those with a broadly diverse customer base) do find the alternate road equally successful. "We don't go narrow and deep," says Freeman. "Our thing is the big selection for the wide variety of customers in Las Vegas. We carry 30 to 40 lines per store. And we just wait to see what sells, and then we switch it around and revamp the assortment to make it more successful."

ZAPPED BY LASERS?

The one area that threatens to affect high-end business (and for that matter, all optical business) is refractive surgery. "More and more we will see the high-end business affected by the refractive laser business," says Josephson. "We have 12 refractive surgery centers in Toronto alone. It's only a matter of time before everyone else will be affected in this way."

Josephson also notes that Canada now even has "discount" laser surgery centers that can offer Americans coming to Toronto up to a $5,000 savings on their refractive surgery, "if that's what you want to do."

Adds Hawkins, "Refractive surgery is going to have an effect. I've not seen an increase in my business because of refractive surgery, whereas we thought people might come in for their readers or other eyewear after the surgery. It's crazy: They spend $5,000 on surgery and then go to Wal-Mart and buy a pair of $10 readers. That's the mentality we're dealing with."

Says another industry insider, "Refractive surgery has hurt people. It cost one large optical chain about $1 million in sales last year."

Some refuse to stand on the sidelines watching their business change. In response to the situation, Josephson has formed Image Sculpting International, Inc., the umbrella company under which his seven optical shops fall as well as a new laser surgery center in Toronto. (At press time, he had just signed a letter of intent to buy a laser center in Detroit as well.) The plan is to integrate the two businesses--laser centers and optical shops--for future success.

"We chose a direction with cosmetic refractive surgery that will keep us high-end and moving forward," he says. "We will cross-market cosmetic and refractive procedures with our store business," says Josephson. "We can get sunglass sales off that side as well as other business."

The strategy is to tie the laser centers into the stores by talking to patients about the products available at the optical shops both before and after the surgery. Store coupons will also be handed out post-surgery and cross-marketing brochures will be present in both the stores and laser center.

Despite the proactive movement on the part of some high-end players, many dispensers still remain undaunted about conducting business as status quo. Some, in fact, say that laser surgery may even be advantageous to optical dispensers. "We've had some regular patients who went ahead and had it done," says Heller. "But my business has grown 20 to 25 percent in the past two years. Maybe it's just making people more aware of their eyes."

IN THE END

Despite some concerns, all signs point to the continuation of a healthy high-end market. "The high-end market is going to enjoy tremendous years coming up," says Tris Coffin, owner of Montreal-based Tris Coffin Opticians. "The next eight to 10 years will be strong because of the economy and the availability of good people to work in the stores."

Strong assortments, focused merchandising, a knowledgeable and high-end savvy sales staff, as well as special customer service, are all part of what will make a winning business. "Part of the success in this business comes from providing high-end care for the client," says Josephson. "We are extremely service-oriented and we do a lot of things on a no-charge basis. People come to us 18 months later and don't like their glasses, so we replace them for free. Or if they don't like them right away, we will replace them with something else."

Those who focus can reap the rewards of this unique and ever-changing category that continues to grow. "It's a stronger business," says Ellis. "It's the state of the economy and the fact that there's so much more beautiful product available. Before people were not so exposed to high-end merchandise and there were not so many brand names out there. But now it's catching on."FB