Vision Express has announced the acquisition of 65 optical practices to strengthen its store count and geographical reach. Joe Ayling interviewed the multiple's boss, Jonathan Lawson, to find out more
Jonathan Lawson is no stranger to retail expansion and three years into leading Vision Express is making significant headway on the high street.
However, the former Greene King and Sainsbury’s executive insists there is no set formula when it comes to making new acquisitions. ‘Unlike some people may believe, we don’t sit in our multiple offices with a list of targets with bullseyes on,’ Lawson told Optician.
Late last week, though, VE threw more than a treble 20 with its acquisition of 65 practices from Rayner & Keeler for an undisclosed sum.
More than half of the practices will be rebranded as VE and take the multiple’s portfolio up to 367 practices in the UK and Ireland. However, 27 will shut down with their optical services transferred to nearby VE locations.
It is the latest in a trail of acquisitions by the company that has seen it take on a mixture of staff, patients and premises in each case.
Last summer, eight Crown Eyeglass practices in the North West were purchased, with half kept open for rebranding (News 10.05.13), while the multiple also acquired the 2020 Optical Store in London (News 05.07.13) but transferred its patients to a nearby flagship practice on Oxford Street.
Meanwhile, just this month VE owner GrandVision snapped up online contact lens retailer Lenstore to bolster the firm’s internet retailing prowess.
The addition of the Rayner locations is an equally calculated move, which crucially increases exposure in new areas. Lawson said: ‘My experience in acquisitions such as this is that you can never really target the time or if they’re going to come up or what comes up – they just do. As and when those opportunities present themselves we do a lot of work, we crawl all over it and if the deal creates value for both sides then hopefully a deal can be done, and that’s what we’ve done here.
‘I think it creates value for Rayner and allows them to focus on areas they wish to focus on. It creates value for us and gives us penetration in areas that previously we’ve not been represented, such as areas in Wales and the North West. In other areas where we overlap it allows us to take a large proportion of that business into our existing assets.’
Neither company revealed the transaction price, although Rayner & Keeler plans a significant investment plan itself over the next three years, including a new UK manufacturing facility as it continues to focus on its intraocular lens business (News page 5).
Lawson said: ‘Clearly we’d have our own investment hurdle rates that we would use as part of our own business and as part of the bigger group. For this to go ahead it needs to satisfy them. The key bit for me is I think these are good stores in good locations.
‘Our key focus from pretty much day one will be to drive the level of testing days in those store locations, driving more [eye] exams, serving more customers and I think that we’ve proven well capable of doing that in other acquisitions.’
However, while changes will be afoot for many of the new locations, there are similarities between the two companies that will aid the transition.
‘There is quite a lot of crossover, by that I mean we are a broad appeal multiple optical retailer and optical care provider,’ said Lawson. ‘There are four or five segments within the optical sector that we believe denote the different customer bases, with slightly different biases, but we target all of those and have a brand that we believe appeals to all of those.’
The segments Lawson referred to include older health conscious, younger brand conscious, contact lens-orientated and value seeking patients. ‘So when you ask if there’s a strong overlap between us and Rayner, the answer is yes and I’d expect there to be,’ he added.
Following the deal, it is hoped the 258 Rayner staff involved (see news) will move over to VE as part of the rebranding and relocations. But, with 27 practices halting operations, the potential for job losses remains.
Lawson said: ‘We’ve made clear both in our release and at a store by store level this is a delicate process we’re going through because these are real people and great people. Our view of the people in these stores has been really positive.
‘We will attempt to take as many of those people with us, either to the store where we’re aiming to transfer that business to or potentially to other businesses as well. If people are mobile that gives us opportunities in other locations.
‘Of course there is always the potential risk that if we can’t find the right positions for people in the right places then there is the potential for redundancy, but we will do everything in our power to keep that to a minimum.’
Despite this possibility the changes will bring a new challenge for Rayner staff as they are inducted into an optical retailer growing at a healthy rate. But is there yet more expansion on the horizon?
Lawson added: ‘You can never pick or choose the time when things occur. We’ve had a good three years and delivered good sales growth for the last three years and that’s come through some very hard work by our fantastic teams around service, offering fantastic value for money and trying to differentiate ourselves on range and quality.
‘That now puts us in a position where we can look at growth. I’m not considering any further large acquisitions at the moment, but we will see more single sites opening as long as they are in the right location and the right price.
‘Elements such as business rates make you very mindful about where you do take on that incremental overhead. We’ve got a range of different locations where we’d like to see ourselves, so as and when opportunities become available then we’ll take them.’