Sears Acquires Eye-Care Chain ‘Super Stores’ : $52.4-Million Purchase Launches Firm Into the Specialty Retail Market

Mass merchandiser Sears has launched its long-awaited foray into specialty retailing with the $52.4-million purchase of a chain of eye-care “super stores.”

The acquisition, announced on Friday by Eye Care Centers of America, would give Sears a foothold in the promising eye-care business, which analysts say stands to benefit from the millions of aging Baby Boomers who will have a greater need for eye glasses.

The eye-care company, based in San Antonio, Tex., plans to expand the number of its super stores from 41 to 500 by 1992, said firm President Jack V. Gunion. The chain operates stores in Texas, Arizona, Louisiana, California (one in Fresno and one in Bakersfield) and New Mexico under the names EyePro Express, 20/20 Eyecare, and Eye Masters.

Eye care super stores, ranging in size from 5,000 to 20,000 square feet, are the newest wrinkle in the eye-care industry that saw $8 billion in sales last year. Besides selling eye glass frames, the stores offer customers an optometrist who performs eye exams and writes prescriptions to machines that grind the lenses--all under one roof. Each of Eye Care Center’s super stores ring up $1 million a year in sales, Gunion said.

Role of Chain Stores

For Sears, the acquisition is the first of many expected to be made by its specialty merchandising unit. Sears, concerned about the sluggish growth of its mass merchandise and department store businesses, created the unit in January to acquire faster growing specialty retailers.

Once an industry dominated by independent optometrists and eye-care specialists in small offices, chain stores are increasingly playing a larger role--chains now account for 16% of all eye-care stores and 25% of retail sales.

Although eye care is not a fast growing industry, Sears and other investors have been lured by promises of faster growth. With millions of Baby Boomers pushing 40--the age at which most people’s eyesight begins to fail--”The future is bright for the industry,” said retailing analyst Rick Nelson at Duff & Phelps. “Personally, I discovered I needed glasses within the last year, and there are a lot of people in my age group in the same boat,” said the 29-year-old analyst.

Consumers’ perception of eye glasses have also changed to the benefit of the industry. “In 20 years, eye wear has evolved from a health care device that was ugly to a health care device that is a fashion accessory,” said Leo Roberts, editor of Eyecare Business.

Roberts said the lifting of restrictions on eye-care services and markups of 250% or more on lenses, frames and other products have also been responsible for attracting big retailers.

Sears already has eye-care stores--many operated by Cole National--in 600 of its department stores. Gunion said its Eye Care Center super stores stores will be opened outside the department stores.

Nation’s Biggest Eye-Care Chains

Number of stores Pearle Health Services, Dallas, subsidiary of Grandmet USA. Cole National, Cleveland, subsidiary of CNC Holding Corp. Royal International Optical, Dallas, Benson Optical, Minnetonka, Minn., subsidiary of Frigitronics. Sterling Optical, Woodbury, N.Y., subsidiary of IPCO Corp. Precision Lens Crafters, Cincinnati, Ohio, subsidiary of U.S. Shoe. Duling Optical, Louisville, Ky., subsidiary of D&K; Corp.

Source: Eyecare Business magazine