In a surprising move, $2.6 billion eye care benefits provider VSP on Monday acquired Marchon Eyewear Inc. for $735 million in cash and debt.
Under the terms of the agreement, Marchon, whose revenues exceeded $525 million last year, will become a wholly owned subsidiary of the Rancho Cordova, Calif.-based VSP. The company delivers full-service eye care benefits to 55 million members in the U.S. and Canada and dispenses eyewear technologies and services to private practice eye doctors. The firm also provides low-income, uninsured children with free eye care.
Al Berg, Marchon’s president and chief executive officer, and Larry Roth, executive vice president, along with the eyewear manufacturer’s global team, will continue in their current roles. Marchon will continue to operate from its Melville, N.Y., headquarters as an independent entity within the VSP organization.
“We were looking for the right strategic move and this deal has been about a year in the making,” Berg told WWD. “Our industry has gone through a number of changes in the last 10 years, and while we are successful global players, we have bigger competitors and felt we needed a long-term strategy to position Marchon for the next 100 years. We’re growing globally but a lot more is needed to invest in growth — whether it’s acquisition or expansion of factories we already own or the expansion of sales offices around the world. We now have the resources to increase our business sizably and go head-to-head with the two biggest players [Luxottica and Safilo Groups] in the industry.”
Marchon produces eyewear and sunwear for such brands as Calvin Klein, Coach, Emilio Pucci and Michael Kors. Additionally, the company manufactures its own collections of eyewear under the Airlock and Flexon brands. The company was founded in 1983 by Berg, Roth and Jeff White, who died in 2005.
According to Berg, the acquisition will equip VSP’s 25,000 independent optometrists with Marchon’s eyewear collections for their retail divisions as well as the firm’s branding and sales tools. As part of the transaction, VSP will acquire Marchon’s 50 percent ownership interest in Eye Designs, which provides custom interior design and merchandising systems for the optical industry.
“Today, it’s very hard for optometrists to be successful on both the medical and business side,” Berg said. “Our experience is on the commercial side — in training, marketing, merchandising and in designing and building offices. We can help take doctors’ businesses to the commercial side and provide an environment of successful business.”
Doctors under the VSP umbrella will in turn encourage patients to purchase Marchon frames, but will not sell Marchon exclusively. The firm is not currently planning to open its own optical stores, but sunwear outlets will be considered in the next few years.
Marchon’s move into the managed care arena follows Luxottica’s lead. The Milan-based company, which owns Lenscrafters and Pearle Vision, offers a full range of its licensed collections at those facilities. According to Berg, Marchon is trying to build its new business model on targeting both the managed care and retail customer equally.
“[Luxottica’s] goal is to sell their own product in their own stores,” Berg said. “So from our perspective, our job is to help convince optometrists to dispense more of our product and show their patients why they should carry more Marchon product.”
Berg said each of Marchon’s licensed brands were enthusiastic over the news and that the deal has not affected department store accounts, which will likely carry more fashion-oriented frames than their optical counterparts.
“We met with all of our licensors,” Berg said, adding their enthusiasm for the deal was universal. “They need strong licensees in our industry. They are happy with Marchon but they also believe that the stronger Marchon is, the better it is for them. They understand the competitive landscape of this industry.”
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye