Luxottica’s staff has embraced a management decision to restructure its business and invest over AUD$65 million in turning OPSM into an optical ‘Super Brand’. The move will mean the closure of 19 per cent – or about 112 – of its 567 optical stores in Australia and New Zealand over the next 24 months.
In an interview with mivision, Chris Beer, CEO Asia Pacific, Greater China & South Africa at Luxottica Retail said the stores being closed would be the lower performing optical stores that operate under the Budget Eyewear and Just Spectacles brands as well as the Laubman & Pank brand in New South Wales and Victoria. He went on to say that “longer term, Luxottica plans to open more stores in locations better suited to its customers’ needs.”
In its effort to re-direct resources to the growth of OPSM and its eye care resources a further 70 stores will be re-badged under the OPSM brand. Staff at stores due to close will be redeployed to rebranded stores and redundancies are expected to be minimal.
Mr. Beer, said the rationalisation of the ‘weaker’ brands will enable the company to better use capital to grow OPSM into an optical ‘Super Brand’ as it has done in Britain, China and the US.
Luxottica will double capital expenditure… spend an extra AUD$5 million promoting the OPSM brand… (and) invest AUD$20 million… in optical equipment
Focus, Simplify, Connect
He said the changes are all part of Luxottica’s plan to focus and simplify the business, and to connect with staff and customers. “We made the decision to ‘get out of the race to the bottom’ a long time ago and instead focus on “eye care and health, great brands and service. When we do that well, we win and no-one can beat us.”
“So we looked at where to invest and reviewed all of our businesses, assessing the best growth opportunities. Laubman & Pank has an amazing heritage in South Australia, Western Australia, Northern Territory and Queensland, but not Australia wide. We’ve decided to re-brand the Laubman & Pank stores to OPSM in NSW and Victoria.”
The Budget Eyewear stores will transition to OPSM or close.
Mr. Beer said that in some large shopping centres the decision could mean the closure of a number of optical stores, however as a result, the remaining OPSM stores would probably grow in size and scale. “We’ll take the best from our three ‘worlds’ to enhance the OPSM brand and we’ll transition the customers. That may mean we need to build bigger practices with more clinics and multiple optometrists.”
He said Luxottica would be “working hard” to keep redundancies to a minimum. “We’ve spent a lot of money training staff and we’re all about growing fast so we’re going to need more people. Over the past three years we’ve had record recruitment and the lowest vacancies we’ve ever experienced. What we’re doing now with OPSM will enhance that even more.”
Raising the Bar of Eye Care
To support the decision, Luxottica will double capital expenditure this year to AUD$40 million and spend an extra AUD$5 million promoting the OPSM brand. Additionally, the company will invest AUD$20 million over two years in optical equipment to improve early detection of eye diseases.
“We feel strongly about raising the bar of eye care,” said Mr. Beer. “We’ve signed a Heads of Agreement to spend AUD$20 million on optometry equipment in the next 24 months.”
Under the exclusive agreement, Luxottica will launch and roll out new technology from Optos over the next two to three years.
Mr. Beer said that the digital retinal cameras, which offer a much wider scan than has been previously available, are currently in 30 stores and will be in a total of 55 strategically located OPSM ‘Eyecare Hubs’ in Australia and New Zealand by the end of March.
Over the next two years, Luxottica plans to install a total of 160 cameras in its OPSM stores nationwide.
He said the new technology is just one step beneath the technology used by ophthalmologists.
Industry reaction to the news, which was published on mivision’s website and Facebook page, was mixed.