Luxottica: initial steps in the integration process of Cole National
Luxottica Group has announced initial steps in the integration process of Cole National Corporation. 'The integration of Cole National represents a key step in the strategy for future growth of our Group', said Leonardo Del Vecchio, chairman of Luxottica Group. 'In fact, it further enhances our leadership position in the single most important optical market in the world, North America. This is something that has been at the core of our strategy since the acquisition of LensCrafters in 1995'.
Luxottica Group believes that the retail format and commercial model of Cole National are highly complementary to its existing operations in North America. Together the two are stronger, more efficient and form a broader platform from which to generate additional synergies within retail, managed vision care, manufacturing and wholesale. This is also an important opportunity for Luxottica Group to enter new channels through Cole National's presence in franchising and licensed brands.
Luxottica Group will fully integrate its North American retail division and Cole National into one business. As the integration process goes forward, Cole National's retail store and field management systems will continue to operate as usual to serve their customer base. Cole National's corporate, administrative and service center functions will be consolidated from Twinsburg, OH, to Cincinnati, OH, where Luxottica Retail North America is headquartered. Things Remembered will be managed separately from the Company's optical business.
Over the next few months, the Group will study, review and confirm Cole National's non-store operations, distribution systems, product mix, manufacturing labs, technology and other business areas. The goal is to identify maximum synergies, areas for improvement and opportunities for growing the brands.
Luxottica Group anticipates many opportunities to enhance current business models. For example, the two companies' managed vision care (Mvc) businesses, EyeMed and Cole Managed Vision, already offer innovative and diverse insurance products with balanced provider panels of independent optometrists, ophathmologists, opticians and retail locations. By combining, Luxottica Group's managed vision care operations will benefit from an even more compelling proposition, which will allow it to be more competitive in this important segment of the U.S. optical market.
In this initial transition period Luxottica Group expects that the Cole National acquisition will have essentially a neutral impact on Group profitability for the three-month period to December 2004. For fiscal year 2004, the Group currently expects at most a € 0.01 dilutive effect on consolidated earnings per share (EPS), to EPS of € 0.64, or EPADS of US$ 0.80 (based on a € 1 = US$ 1.25 exchange rate).
'We look forward to the contribution that the addition of Cole National will bring to our North American retail operations and Group as a whole', concluded Mr. Del Vecchio. '2004 has already been and will close as a particularly solid year for our organization, setting the stage for future growth'.
