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GrandVision’s Business Update Details International Sales Recovery and Notes Consumer Shift to Online Sales

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SCHIPHOL, The Netherlands—GrandVision NV (EURONEXT: GVNV) said in a business update this week that its worldwide “operational situation has developed considerably” since May when it issued first-quarter sales results that were significantly impacted by COVID-19. “As governments started to ease measures aimed at containing the spread of COVID-19, we have seen sales improve considerably across many of our markets,” chief executive officer Stephan Borchert said in the announcement. “As of 30 May 2020, approximately 4,700, or 80 percent of our own stores, returned to full operation, including in most of our markets across Europe.” He did not provide details on the operations of the For Eyes store group across the U.S.

In addition, GrandVision said it continues to support EssilorLuxottica “with the shared objective to obtain regulatory approval for the closure” of EssilorLuxottica’s proposed acquisition of HAL's 76.7 percent controlling interest in GrandVision within the 12 to 24 months cited in the deal’s announcement July 31, 2019. VMAIL reported on this proposed deal here.  

In early May, GrandVision said approximately 60 percent of its stores were closed in April and 40 percent were partially open but impacted by various degrees of limitations, as reported by VMAIL. This resulted in “a negative revenue impact” of more than 80 percent compared to April 2019, the announcement noted.

Borchert added, “As we were well prepared to re-open large parts of our store network as soon as possible, the negative year-over-year revenue impact reduced to approximately 55 percent in May. In the first week of June, sales of the fully opened stores were at 87 percent of last year, i.e. a decline of 13 percent, with a negative revenue impact of 20 percent for GrandVision’s total own store base.”

In addition, GrandVision said that over the past few months it has seen “the benefits of our sustained investments in our digital capabilities.” E-commerce sales have climbed more than 80 percent in the first five months of the year, particularly driven by e-commerce sales through company banner websites with growth of almost 190 percent.

During May, GrandVision said it achieved a “particularly strong recovery” in the Benelux, Germany, Austria, Switzerland and across most of the Nordics. In Latin America, where countries have been impacted by COVID-19 a few weeks after Europe and North America, stores in most markets remain either closed or are operating with limited opening hours, the company noted.

During the early part of 2020, GrandVision said it has “started to observe some changes in customer behavior. Even after stores have started to re-open, e-commerce sales are staying at high levels as customers switched sales channels, particularly for contact lenses.”

As a result of this phenomenon, GrandVision said it has further expanded prescription eyeglass e-commerce capabilities, which are now available through 12 banners in eight countries, including Germany, France, Poland, Switzerland, Finland, and three more markets to launch in the coming months.

“Looking ahead, we remain focused on preserving the integrity of the business, including protection of the safety and wellbeing of our employees and customers,” Borchert added. “The current developments we are seeing in our business reconfirm our confidence in the resilience and long-term prospects of our company. We recognize that there may be setbacks and further challenges, but we are confident that the inherent strength of our business will allow GrandVision to continue being a leading player in this market.”

As of May 31, GrandVision said it had a net debt of €842 million, versus a net debt position at the end of 2020’s first quarter of €755 million. “We continue to engage with our relationships banks and we remain confident in our ability to retain liquidity and secure additional funding, also in the event of a prolonged impact of COVID-19,” the announcement noted.