Essilor of America's John Carrier (third from left) with Coastal.com team today at
Coastal headquarters in Vancouver.

VANCOUVER, Canada—Having just completed its acquisition of online vision care retailer Coastal.com on Monday, Essilor International moved quickly to begin the process of integrating the retailer into its global network of eyewear companies.

This morning, Essilor of America president John Carrier welcomed the 350 employees at Coastal.com’s Vancouver headquarters into the Essilor group. He presented them an overview of Essilor’s plans for the company, which will now be headed by newly named Coastal.com CEO Roy Hessel, who also serves as president of online initiatives for Essilor of America. Hessel takes over from Coastal’s founder and former CEO, Roger Hardy, who will remain an advisor to Essilor for the next three years.

In an exclusive interview with VMail, Carrier discussed why Coastal is a good fit for Essilor and how the acquisition will enable Essilor, which already owns two other e-tailers, EyeBuyDirect.com and FramesDirect.com, to significantly expand its online presence and the company’s multichannel capabilities.

Carrier said, “The internet complements traditional distribution channels, which remains the one able to provide added value in taking measurements and supporting wearers. We are vigilant that the development of online sales in the optical industry does not come at the expense of wearer’s safety and the quality of the correction or product performance.”

“What’s unique about Coastal is the combination of the size of the company, the multiple countries it operates in and the multiple products it sells: eyeglasses, sunglasses, contact lenses,” Carrier told VMail. “That’s why we think it’s a good platform for more global expansion. The other online properties we own are much smaller. Most of their business is in the U.S. They certainly did not have the scale and multinational aspect of this one.”

According to Carrier, Coastal does business in about a dozen countries around the world, including Canada, the U.S., Sweden, Norway, Brazil, Australia, New Zealand and Japan.

Carrier said Essilor has no plans to combine the three online businesses, each of which has a distinct identity. “The three brands will remain the same,” said Carrier, adding that Essilor’s brand name won’t be visible to consumers. “It’s the same as with our other businesses,” he noted.

Private label frames will remain Coastal’s core business. “We don’t expect to see this change significantly,” Carrier said.

Although Coastal also sells spectacle lenses, Carrier emphasized that Essilor will not add Varilux, its premium brand of progressive lenses, to Coastal’s product mix or to any of the company’s other online sites.

“We believe the Internet is good for simple prescriptions at this point. We are not going to promote progressives. They’re available but we see it as a channel that’s much better suited to single vision lenses.

“We want to make sure everyone benefits, whether it’s ECPs, consumers or the brand itself,” said Carrier. “So there will be no Varilux. This brand requires the professionalism of ECPs.” However, Essilor does plan to offer Transitions lenses through Coastal. “Transitions has always been sold in all channels,” he observed. “That’s the case today and will remain so.”

Carrier said Coastal, which operates its own prescription lab, will benefit from access to Essilor’s global supply chain, including lens manufacturing facilities and, possibly its lab network.

“From a supply chain standpoint, we can bring synergies that can make Coastal more efficient. It’s a little preliminary to discuss it now. But considering that most products sold through this form of distribution are single vision, stock lenses. So when we’re talking about labs, it’s mostly edging and mounting. Certainly we have capabilities when it comes to distribution of lenses, and we have labs in those countries that serve those global markets. It’s a complex question. We think there will certainly be important benefits for Coastal to rely on Essilor’s entire supply chain.”

One major strategic change Essilor does plan to make is to immediately halt the international expansion of Coastal’s brick-and-mortar stores, an initiative that the company began last year. According to Carrier, Coastal operates two stores in Vancouver, one in Toronto, one in New Zealand, one in Australia and a handful in Sweden.

“Coastal had a large plan for retail expansion in multiple countries,” said Carrier. “Today, we’re making the decision to stop this expansion. Our intention is to look for a divestiture of those stores.”

Essilor will also stop Coastal’s program of giving away free pairs of eyeglasses with a purchase. “For us, as the leader in industry, we do not find it’s the proper way to reflect the proper value of our services. So we’ve taken the decision to immediately de-emphasize the free pair program and shut it down in the next weeks and months.”

Essilor, Carrier added, is also planning to expand MyOnlineOptical, its b-to-b e-commerce capability platform for independent ECPs’ own websites. “We’re going to expand it, it’s growing, we’ve learned a lot but it’s far from having reached its full potential. We think it’s important to eyecare professionals. Online engagement of the consumer, and the information that can be shared. Our goal is to continue to enhance and develop those services to ECPs. Because Coastal has such a big presence in Canada, there will be a little bit of a priority for Essilor to expand, enhance and modify MyOnlineOptical in Canada at first.”

Although Coastal’s earnings have been recently been soft, Carrier anticipates that the company will soon return to profitability. “Coastal has shown nice growth in the past, double digit or high single digits. We expect solid growth, definitely double digit in the future. We are going to focus a bit more on profitability. That’s where we think we can help, with our supply chain, our marketing, our structure and our size. We’ll count on international expansion to accelerate growth.

“To really understand the international aspect of this deal, people have to understand that the Internet is dynamic. We believe, with our industry partners, that we can help influence or shape the way the internet is going to be part of industry’s future, informing consumers and engaging them along with what’s being done by our customers. It all starts with an annual eye exam performed by an optical professional.”