Essilor Acquires 50 Percent Stake in China's Leading Supplier of Mid-Range Sunglasses

By

Hubert Sagnieres.

CHARENTON-LE-PONT, France— Essilor International (ESSI.PA) ) has acquired a 50 percent stake in Xiamen Yarui Optical Company Ltd, China's leading supplier of mid-range sunglasses.

Xiamen Yarui Optical, which has 850 employees, generated revenue of about €42 million in 2012. The company designs and manufactures non-prescription sunglasses that are sold in China under a variety of brands, including Bolon and Molsion, two of the country's best known sunglass brands, Essilor said in its announcement on Nov. 27.

Positioned in the fast-growing mid-range segment, Xiamen Yarui Optical products are sold mainly to Chinese eyecare professionals and department stores representing in all some 30,000 sales outlets throughout the country. The company has a plant in Xiamen, in southeastern China.

Commenting on the transaction, Hubert Sagnieres, Essilor's chairman and CEO said, "The agreement we have just signed with Xiamen Yarui Optical accelerates our development in the prescription and non-prescription sunglass industry and confirms our commitment to protect visual health. By bolstering our brand portfolio, it enables us to respond more effectively to under-penetration, both in China and elsewhere."

Huang Fadiao, Xiamen Yarui Optical's chairman and CEO, said, "Our entry into the Essilor Group is excellent news. It allows us to envision our development calmly and gives us the resources to fully capitalize on the strong reputation of our flagship Bolon brand, which enjoys an awareness rate of nearly 85 percent in China."

The global non-prescription sunglass industry represents a total sales volume of more than 450 million pairs per year, Essilor noted, and is growing approximately twice as fast as the corrective lens industry. In China, sales are highly fragmented and estimated at over 50 million pairs per year with growth in the double digits.

The partnership, the company said, will allow Xiamen Yarui Optical to leverage Essilor's FGX division's expertise in frame purchasing as well as Essilor's prescription lens know-how. Moreover, it will allow FGX to internationalize its brand portfolio and expand its geographical coverage.

Xiamen Yarui Optical is fully consolidated by Essilor as of Nov. 1, 2013.