Luxottica, the Italian eyewear firm has agreed to buy out US retailer Cole National Corp., in order to combines the two top eyeglass retailers and establish a giant in the US market. The deal is for $440 million.
Luxottica is the world's largest eyewear company, with operations in 120 countries. . It owns retail chains LensCrafters and Sunglass Hut, which are leading sellers of prescription glasses and sunglasses, respectively. It also manufactures a range of branded eyeglasses for fashion houses like Prada, Versace, Armani, and Chanel, along with sunglass brands RayBans and Revo. All-in-all, it makes eyewear over 2,000 companies. The company also owns Watch Station and Watch World retell stores, and the EyeMed Vision Care Group, a managed care group. It is a $3 billion company, mostly owned by the founder.
Cole National owns retail chain Perle Vision, along with in-store businesses Sears optical, BJ's Optical Department, and Target optical. It is the #2 eyeglass retailer in the US. The company also runs the largest optical managed care group in the US, with over 34 million members. It also sells gift items through its Things Remembered catalog and mall stores. It has income over $1 billion.
The purchase will rid LensCrafters of its biggest competitor and give Luxottica 24% of the US retail eyeglass market, ten times larger than its nearest competitor.
To be #1 or #2 in a market is great. Even better is to be #1 and #2. [Oligopoly Watch]