The Italian company Luxottica, largest company in the world for glasses, will buy Óticas Carol for € 110 million (R$ 368.6 million). The agreement was signed with the partners of the Brazilian company 3i Group, Neuberger Berman and Siguler Guff & Company, and depends on the approval of the Administrative Council of Economic Defense (Cade) to be concluded. Ronaldo Pereira, president of Óticas Carol, said that the request for approval will be sent to Cade in the coming days. The expectation is to complete the purchase this semester.
The acquisition is the first move by the Italian group since the global acquisition two weeks ago of France’s Essilor International for € 46.3 billion. This operation gives rise to the largest global company of glasses and lenses, with market share of 32% in the world and 28.3% in Brazil, according to Euromonitor International.
The purchase of Óticas Carol in Brazil will lead Luxottica to the leadership in the optical market as well. Óticas Carol has 950 stores in operation in the country and closed 2016 with revenues of R$ 813.7 million, a result 21.4% higher than in 2015. Its market share is 2.3%, according to Euromonitor International .
In a statement, the president of Luxottica, Leonardo Del Vecchio, said the company will verticalize its operation in Brazil with the purchase. Overall, Luxottica has 12 optical networks and a total of 7,400 stores in operation on five continents. From January to September 2016, the company’s retail revenue grew 5.7% to € 3.297 billion and accounted for 81% of total revenue. Total revenue in the period rose 0.2% to € 4.085 billion.
In the Brazilian retail market, Luxottica entered in 2011 with the Sunglass Hut network, which reached 100 stores in the country in 2016, being 73 own units and 27 franchises. The goal was to reach 200 units in five years. “Luxottica has a major retail operation in the international market, but faced difficulties in Brazil to grow in this area, due to the complexity of the sector,” Pereira said.
Óticas Carol president added that with the purchase, the retailer gains a more robust structure to carry out its expansion plan. For 2017, Óticas Carol aims to open 175 franchise stores and reach a revenue of R$ 918 million. Pereira said that this goal can be changed in the coming months, depending on the definitions that Luxottica takes on the network.
Asked about the maintenance of two optical retail chains in the country, Luxottica reported that “Óticas Carol has proved to be efficient and effective in the market” and that “it is too early to discuss the future of Sunglass Hut, since the acquisition still needs Be approved by Cade. ”
The Brazilian optical market is very pulverized, with approximately 26 thousand companies in the country, according to the Brazilian Optical Industry Association (Abióptica). In addition to Óticas Carol, Óculos Diniz is among the leaders, with more than 900 stores, followed by Chilli Beans, with just over 700 units. The other networks have less than 100 stores.
For the president of the Abioptica, Bento Alcoforado, the acquisition will have limited effect in the sector. “Even if Óticas Carol opens another 150 stores this year, it will continue with a very small portion of the market,” said Alcoforado. He considers it possible to see new acquisitions in the sector throughout the year, as the Brazilian economy shows signs of improvement. Last year, the sector shrank 17% in revenues, to R$ 16.9 billion.
The deal between Luxottica and Óticas Carol took about a year. As part of the agreement, the contracts of Ronaldo Pereira and the directors of the retailer were renewed for another three years. Luxottica will continue to provide its frames and lenses to other retail chains in addition to Óticas Carol in the country.