ANNUAL REPORT 2004 - Luxottica Group

DISTRIBUTION
focused on the relationship between price and quality.
This optical store format offers consumers with the
convenience of taking care of their optical needs in the
same place where they regularly shop for other goods.
Partnering with these leading U.S. retailers allows
Luxottica Group to extend its distribution network to
reach this new customer base.
The product offering at these stores mainly consists of
private label products.
All three chains are extremely active in promoting their
image, though in different ways: Sears Optical mainly
concentrates on TV ad campaigns in America’s
largest states; Target Optical focuses on regional
campaigns with magazine inserts; and BJ’s Optical
uses its BJ’s Journal, a monthly promotional
publication sent to BJ’s Wholesale Club members.
In North America, Luxottica Group operates a total of
1,327 licensed brand store locations, of which 853
Sears Optical, 255 Target Optical stores, and 138 BJ’s
Optical stores. In Canada the licensed brands division
operates 81 Sears Optical Canada stores.
LAB NETWORK
The network of optical labs controlled by Luxottica
Group in the U.S. expanded considerably with the
recent Cole National acquisition.
With close to 1,200 in-store LensCrafters and Pearle
Vision optical labs and eight central labs, Luxottica
Group now manages one of the largest networks of
optical manufacturing labs in the U.S., enabling the
Group to continually enhance the quality of its
products and services through the use of advanced
technology.
SUNGLASS HUT
Sunglass Hut, synonymous with sport, fashion and the
latest trends, is the largest specialty sun retailer with
1,858 stores, 1,584 of which are in North America.
Launched in 1971, initially located inside major
department stores, Sunglass Hut has always
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distinguished itself with a young, active, fashionable
image. Since its acquisition by Luxottica Group in
2001, Sunglass Hut has started to more fully realize its
potential thanks to increased focus on fashion
eyewear, keeping it more closely aligned with trends in
the sun segment.
Over the last few years, the connection between
fashion and sunglasses has become increasingly
important. In order to capitalize on this trend, in 2003
Sunglass Hut began to reposition its brand identity,
emphasizing the fashion element and culminating in
the 2004 campaign “Spontaneous Expression”. With
this new positioning Sunglass Hut increases its appeal
with fashion-minded consumers seeking to satisfy
their personal sense of style.
The program included restyling and repositioning
stores as well as improving customer service. In fact,
2004 was the second year of measuring customer
service through the Mystery Shopper program. Twothirds
of stores rated met 78% of targeted goals and
3% scored 100%.
Among the most important advertising campaigns of
2004, Sunglass Hut collaborated with “Rolling Stone”
magazine for the 50 years of Rock and Roll
celebrations, sponsoring a special section in which
musicians wore Luxottica Group sun frames such as
Ray-Ban and Revo.
In 2004 various initiatives were carried out to
strengthen the sunglasshut.com website and its links
to other sites such as those of the Ray-Ban, Revo and
Versace brands in particular, in order to expand its
reach in the on-line market. Sales results have been
very positive in this respect.
In terms of product, Sunglass Hut continued to benefit
from the strength of the Group’s brand portfolio. Over
50% of units sold in 2004 were Luxottica Group
products.
In 2004 Ray-Ban, Arnette and Revo launched a large
selection of new models and Revo enjoyed 50%
growth in sales at the chain. Fashion collections such
as Chanel, Prada and Versace also showed excellent
results. Thanks in part to the film Starsky & Hutch, the