How much room offers the lower part of the market?

november 4, 2010

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Last week Dutch optical chain Eyes & More announced it did find an investor to accelerate growth of the company. With all-in prices of 95 euro for a frame with unifocal lenses, this discounter, who likes to compare itself with H&M, has taken a position at the lower part of the market. The figures show it is hard to create sales there. According to the company’s information the 57 or 58 stores generate sales of 16 million euro which is less as 300.000 euro per store. It is hard to call that successful although apparently investment company Vendis Capital believes in the opportunities. The lower part of the market in the Netherlands has strong players like Pearle and Hans Anders and it will be hard for Eyes & More to compete with them. Even Specsavers with a much higher budget and intensive marketing campaigns did not succeed in beating them although it tried really hard. Increasing the scale of the company is important when it comes to purchasing deals with suppliers and with stores with sales of less than 300.000 euro, this increase can only be realized by opening more stores. From that point of view the investment is a logical one. Locally however the Eyes & More stores have very few opportunities to become significant players. The comparison with H&M is funny but not based on any kind of similarity. H&M’s success is based on a distinguishing collection and striking marketing campaigns. Eyes & More doesn’t carry a distinguishing collection and has no money for marketing which leaves the company with just the price as it’s sole weapon. This will not be enough to become an important player and like for like the stores will have few chances for significant growth.

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