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Hot List: July 2007

Complimentary Complaints

1 The customers who take the time to complain are your most loyal customers. These complainers speak up because they believe in you, in spite of problems they experience. In a recent article, "Turn Customer Complaints into Assets" by John Mehrmann at businessknowhow.com, the author reminds retailers not to take it personally. These comments express the dissatisfaction to you, but you are not the problem. Instead of taking customer complaints as a personal attack, he recommends that retailers think of themselves as someone the customer is coming to for help. Handle the situation right and you will keep a good client. Handle it inadequately and you've just lost a customer. And, even worse, they will communicate the experience to other potential customers.

Clean Sweep

2. According to AdAge.com, Unilever has decided to focus its marketing efforts more on baby boomers based on the following data: 45% of households today are boomers, BUT, because of their higher spending power they account for 60% of spending on package goods. And, statistically speaking, they will continue to buy most the company's products for the next decade.

4 sight fight

The World Health Assembly, the decision-making body of the World Health Organization (WHO), has adopted its Medium-Term Strategic Plan (MTSP) for 2008-2013, which commits WHO to giving greater attention to blindness and visual impairment. As a result, governments worldwide are stepping up the fight against visual impairment, and they will receive greater support from WHO in doing so.

Essilor Acquires Sutherlin

Essilor of America, Essilor International's U.S. subsidiary, has acquired a majority stake in Sutherlin Optical Company and purchased the assets of Dispensers Optical Service Corp.'s safety prescription division.

Located in Kansas City and Joplin, Mo., Sutherlin Optical is a prescription lab with $13 million in revenue and 75 employees. Dispensers Optical Service Corp. is based in Louisville, Ky., and generates $5 million in revenue.

Oakley Merges

Luxottica Group S.p.A. and Oakley, Inc., have entered into a definitive merger agreement with the unanimous approval of both companies' boards of directors.

Under the agreement, Luxottica Group will acquire all of the outstanding shares of Oakley for a cash purchase price of $29.30 per share, together with the purchase of all outstanding options and other equity rights at the same price per share less the exercise price.

The total purchase price will be approximately $2.1 billion, representing an approximate premium of 18 percent over the most recent 30-day average NYSE trading price of Oakley shares and approximately 24 percent over the most recent three-month average trading price. Oakley's Board of Directors recommended the offer to Oakley's shareholders for approval, and the transaction is expected to close in the second half of 2007. This acquisition is subject to the approval of Oakley's shareholders and the satisfaction of other customary conditions, including various governmental approvals.

Luxottica is expected to provide a global platform for Oakley brands and grow the brand's international distribution capabilities, providing what the company calls: "enhanced economies of scale with respect to sourcing and distribution, and approximately EUR 100 million per year in operating synergies expected within three years."

Jim Jannard, Oakley, Inc., founder, chairman, and "chief mad scientist," noted, "Oakley will continue to be Oakley, but with much greater resources and a platform for realizing the true potential of our brand and company."

On the Town

Recreation and recognition went hand in hand this month as optical eased into summer.

REM Eyewear celebrated south of the border recently. The President's Club hosted REM's elite sales group at the Pueblo Bonito Pacifica in Cabo San Lucas. At Mido, REM's Base Curve also celebrated the signing of a new distribution agreement with Formelli, Italy.

Optical Shop of Aspen (OSA) and ic! Berlin designer and founder Ralph Anderl recently hosted the first U.S. event for ic! Berlin, held at the OSA store in Scottsdale, Ariz. Anderl flew in from Berlin to meet customers and fans of his eyewear.

Robertson Optical Laboratories of Columbia, located in Columbia, S.C., celebrated the grand opening of its 12,500 square-foot building with a Cinco de Mayo-themed fete for 300 ECPs and their guests. A drawing was held for a Mexican vacation which was donated by Carl Zeiss Vision.

Proenza Schouler's Jack McCollough and Lazaro Hernandez were named co-winners of the Womenswear Designer of the year award at the Council of Fashion Designers' 25th anniversary awards ceremony. Proenza Schouler and L'Amy America will launch a sunwear collection in September during New York's upcoming Fashion Week.

Inspired by his gothic collection of eyewear, Robert La Roche hosted a party during Mido at the Il Gattopardo Café in Milan. This early 19th century church hosted modern entertainments including Swiss rock band Lunatica, the special act of the evening.

Clockwise from top: REM Eyewear's Mike Hundert with members of the President's Club in Cabo San Lucas; Robert La Roche's bash held in Milan; the George Westinghouse School student achievers; l-r Saverio Vecchia and Massimo Vecchia of Formelli, and Steve Horowitz and Heike Kremser of Base Curve; OSA and ic! Berlin gather; designers for Proenza Schouler celebrate; Robertson Optical's fiesta

George Westinghouse High School held an award ceremony honoring senior Vision Care Technology students who were the recipients of graduation awards from optical council members. Student Akada Calliste was also selected to receive a citywide Health Career Advisory Commission Achievement Award.

FIT gets Frame Focus

The winning sunglass design (top); and the student winners pose for a photograph with Luxottica's Pierre Fay (r) (bottom)

The Fashion Institute of Technology (FIT) presented two new awards at its recent 6th Annual Next Generation Awards. Luxottica Group sponsored the first-ever sunwear and optical frames categories of the designer competition. It was the first time the design school has required seniors to present eyewear as part of their final accessories project.

Gerard Yosca, accessories designer, was the evening's speaker and Pierre Fay, executive vice president of Luxottica, also spoke about the new eyewear category.

License Lineup

Jimmy Choo and Sàfilo Group announced a license agreement for the production and distribution of Jimmy Choo branded sunglasses and optical frames through 2015. The line is set to launch in January.

Dana Buchman has signed a license agreement with the Kenmark Group to design and manufacture Dana Buchman Vision ophthalmic frames and sunglasses. The line will officially launch at Vision Expo West.

On the Tube

Sunwear took center stage on the small screen this summer with several television segments dedicated to sunwear trends and selection.

Sàfilo's sunwear, including Gucci, Armani, and YSL was featured on the "E! Sizzling Summer Preview."

Marchon's sunwear was in the spotlight on "Oprah." The daytime diva and audience were fitted with sunwear styles from Coach, Fendi, and Sean John lines.

Clips from the small-screen show off the latest broadcasts with sunwear fashion focuses featuring products from Sàfilo on E! Television's news program and Marchon on "Oprah" as part of the talk show's summer of 2007 must-haves

STAR Gazers

1. With a marriage that's lasted longer than those of most celebs', two uniquely named children, and a role in the next Marvel Comics' blockbuster, Gwyneth Paltrow, wearing Chloé Myrte Aviators from L'Amy, has plenty of reasons to smile.

2. Legendary designer Karl Lagerfeld is known to be a big fan of Optical Shop of Aspen's eyewear. Here he sports Chrome Hearts style Hung.

3. "Stay" has remained Lisa Loeb's most well-known song, despite the fact she's released many tunes since the 1994 hit. Another thing Loeb is famous for? Always sporting cutting-edge frames. Here the soft-voiced singer wears Lafont style Pivoine.

4. Jamie Ray Newman frequently becomes a fan-favorite when making guest appearances. First it was "CSI," then "Stargate: Atlantis," and finally "Veronica Mars," where she starred as a repeat guest character for six episodes and sported Aoyama Optical's New York Diary style NF5014U.

5. Just because you haven't seen her lately doesn't mean Catherine O'Hara isn't still working on films. The "Best in Show" star, who's wearing Marchon Airlock 720/42, has done voicework for "Over the Hedge," "Chicken Little," and "Brother Bear."

5 Questions for…

Kenmark Group recently became an employee-owned firm as part of its Employee Stock Ownership Program. President Don Howard spoke with EB about how the move will affect the company and optical.

EB: Kenmark's move is unique… what does it mean for employees?

DH: We have instilled in all of our employees that our customers are the reason for our success. Now that our employees are the owners, they have more at stake, and they are taking it to another level. When you own something, you are going to give it more of your personal attention and pride than if you're not an owner. They all have a tangible, personal stake in our success.

It also gives us a terrific recruiting tool because people are building toward their retirement. The longer they work, the more stock they accumulate. It's a terrific means of getting better employees and keeping them.

EB: What does it mean for Kenmark's customers?

DH: They are dealing with the owners of the company. Because we have always focused on service, it might not be something that's a 180-degree change for our customers, but when you take pride in ownership, it shows through. The power of our collective efforts creates a distinct customer experience.

EB: Do you think this will become a trend in the industry?

DH: ESOPs are becoming more popular with privately held companies. Publicly traded companies can't have an ESOP (Employee Stock Ownership Plan). But most of our competitors are privately held. I would like to keep it our little secret. It gives us a competitive advantage being an ESOP.

EB: What do you think the future holds for frame companies?

DH: I think that the bigger players will continue to hold on to the majority of the market share because they have a great offering. And I think the smaller firms will have a reason for being because they serve a niche. It's the fate of the mid-sized companies that concerns me the most.

The mid-sized companies, because of the fact that they have relatively large overhead but they don't have the critical mass to get the brands and factory deliveries, may not remain competitively viable.

EB: How do you recommend ECPs select frame company partners?

DH: What they need to do first is decide who they are and what they want to offer their patient base. Without a degree of distinction, you are just a "me-too" dispenser. Are they a fashion destination? An affordable alternative? What is their business personality?

Once they determine that, they must ally with suppliers that can assist in delivering the message of what they are to their customers and help them fulfill their promise. I think that they need to look at their suppliers and ask: what does this company bring to me to make me different than the ECP down the street?