Essilor & The Coastal Acquisition: A Candid Discussion

AdminWolf

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Please Essilor, no b.s. phrase that uses the term "unwinding".

"unwinding" is a legit phrase when it comes to unloading bricks and mortar -- you don't just close the doors and walk away immediately.

But in terms of the free pair, I contacted Howard this weekend, he's looking into it & will let us know ASAP.

thx
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Alan David

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I can also still go on and order 6 years worth of CL's.

Like someone stated, it could be better that Essilor bought Coastal than a venture capitalist, &
I'm giving them the benefit of a doubt, but it sure looks like they're setting up the cyber-equivalent of a flea market up across the street from me.

Meeting with a Hoya rep this week as I consider parting ways permanently with my new competitor & hope many other OD's do likewise.
 

Kent Jensen

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To my knowledge Essilor owns a majority stake in FramesDirect.com (reported by Vision Monday March 26, 2010). There you can buy your Essilor Digital progressive with Xperio polarized lenses. That's right Essilor will not be selling premium products at Coastal.com, FramesDiirect is entirely different.

from the FramesDirect
In fact, Dr. Hodgson's virtual measurement tool gets even better results than an in-person measurement. FramesDirect.com is the only online eyewear retailer that can determine the perfect height for the progressive lens.

The #1 Choice for Digital Progressive Lenses: The Essilor Ideal™ Advanced
As a company founded by doctors, FramesDirect.com sells nothing but the absolute best lenses available on the market today. The Essilor Ideal™ Advanced lens delivers effortless vision in a full back-sided, digitally surfaced lens design. Other key features of the lens include:


Dr Purcell has done a good job of keeping me as far away as possible from Essilor
 

Kent H. Juffer

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"unwinding" is a legit phrase when it comes to unloading bricks and mortar -- you don't just close the doors and walk away immediately.

But in terms of the free pair, I contacted Howard this weekend, he's looking into it & will let us know ASAP.

thx
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I was referring to the free pair promotion and not the "bricks and mortar".
 

Aaron Buthod

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I had totally stopped doing Business with Essilor for the last several years and the Eyemed deal brought me back in. Yes I'm bitter about it.

We did as well. 1st they bought Shamir and then the EyeMed deal. There's no avoiding them at this point. We have been assimilated.
 

Jeff Kiener

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And Transitions.

You have a hard time not buying Essilor, but we can keep trying.

Hopefully, Craig's blind tee shot will find the 450-yds-away hole!
 

Mark Bourdeau

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Is it known if they will require any prescription verification at Coastal now that Essilor is at the helm? Active or passive? Contacts or glasses?
Encouraging eye exams through the need for current prescriptions is far more effective than just promoting their value.
 
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Michael Toulch

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This transaction proves the business model can be a winner.

Build a website, give away glasses, spend some $$ on pay-per-click, don't worry about profits of course, in fact lose as much $as you can along the way. Once you have enough names and addresses, a giant from the "industry" will give you your exit pass, along with a billion dollars!

The venture capitalists must be salivating. How many newer and better Clearly Contacts are being prepared for launch right now BECAUSE of this acquisition?

Will the same giant come along and buy them all ?
 

AdminWolf

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This transaction proves the business model can be a winner. Build a website, give away glasses, spend some $$ on pay-per-click, don't worry about profits of course, in fact lose as much $as you can along the way. Once you have enough names and addresses, a giant from the "industry" will give you your exit pass, along with a billion dollars! The venture capitalists must be salivating. How many newer and better Clearly Contacts are being prepared for launch right now BECAUSE of this acquisition? Will the same giant come along and buy them all ?
This transaction proves the business model can be a winner.

Build a website, give away glasses, spend some $$ on pay-per-click, don't worry about profits of course, in fact lose as much $as you can along the way. Once you have enough names and addresses, a giant from the "industry" will give you your exit pass, along with a billion dollars!

The venture capitalists must be salivating. How many newer and better Clearly Contacts are being prepared for launch right now BECAUSE of this acquisition?

Will the same giant come along and buy them all ?

That's not normally how it works -- Even large corporations have only a certain amount of $ available for acquisitions, and typically they only look at "the best" when making investment decisions.

It wasn't like Coastal was just "two guys and a chicken coop" building a web site -- over a period of years they built out a reliable fulfillment center (multinational, no less), as well as executing on a successful marketing strategy.

As much as you may dislike Coastal, these things aren't cheap or easy to do. If I were a VC, i'd be wary about parking my dollars with someone trying to replicate this type of business from scratch.

And based on what Howard discussed in the webinar (ditching bricks-and-mortar, ditching "free pair", excluding high-end product), it sounds like they are taking the model to a totally different place. Thus, I conclude that the company was acquired because of their strong operational ability and reliable platform. What will be done with the platform remains to be seen!
 

Michael Toulch

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Actually it isn't that I like or dislike CC. The people who built it are excellent entrepreneurs who have "scored" big time and good for them.
These things do NOT go unnoticed in the financial world. It won't be 2 guys in a chicken coop who start up the next online optical which goes super nova. The size of this acquisition, the multiple paid for losses, simply validates the model.
 

AdminWolf

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Actually it isn't that I like or dislike CC. The people who built it are excellent entrepreneurs who have "scored" big time and good for them.
These things do NOT go unnoticed in the financial world. It won't be 2 guys in a chicken coop who start up the next online optical which goes super nova. The size of this acquisition, the multiple paid for losses, simply validates the model.

So you think Essilor is going to keep paying hundreds of millions of dollars every time a new online optical spins up? I think you're missing the point of this acquisition.

If I were a VC, and someone who has no currently operating online optical business came to me asking for $500MM to start a brand new online optical -- one that would burn hundreds of millions in pursuit of growth, with no clear path to profitability, but with the slim hope of acquisition by one of the few major players with deep pockets -- I would turn away. But that's the scale of investment we're talking about to compete in this retail space.

Thus if you are looking for another Coastal to spring up any time soon, I submit to you that the odds are that the site must already exist in some form. Can you think of any that could grow into their shoes?
 

Jeff Kiener

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Cho Men Pho Offshore You Don't Need No Stinkin' Prescriptions R Us will be the next acquisition target.
 
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Michael Toulch

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So you think Essilor is going to keep paying hundreds of millions of dollars every time a new online optical spins up? I think you're missing the point of this acquisition.

If I were a VC, and someone who has no currently operating online optical business came to me asking for $500MM to start a brand new online optical -- one that would burn hundreds of millions in pursuit of growth, with no clear path to profitability, but with the slim hope of acquisition by one of the few major players with deep pockets -- I would turn away. But that's the scale of investment we're talking about to compete in this retail space.

Thus if you are looking for another Coastal to spring up any time soon, I submit to you that the odds are that the site must already exist in some form. Can you think of any that could grow into their shoes?

What was so special about Coastal? $50 million in eyeglass sales....
As soon as prices are raised (or the free deals are removed) I say that customers will not remain loyal to Clearly. Someone else will come to fill the price gap. Barriers to entry are very low.
There is PLENTY of VC money out there.
Now about the spin regarding the acquisition being about supplying glasses to the poor masses....So this outfit in Vancouver Canada is going to equip all the underprivileged kids around the world with Derek Cardigan frames? I'd like to hear more about that business plan.
 

Paul Farkas

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An Optometric Icon shares his reminiscences with Dr Howard Purcell...

Dr Irving Bennett sent an e mail to Dr Howard Purcell and copied me. They were gracious to allow me to copy it and share with you...

Howard:

I finally got the time to listen to your presentation on odwire.org. You did a very credible job explaining Essilor's rationale in its purchase of Coastal and you gave the audience a perspective not often apparent when new, and different, thoughts are advanced. Your talk and the subject of your talk brought back memories of two activities in my life where I felt I was swimming upstream and against the current of public opinion and conventional wisdom.

The first was in 1965 and my last "editorial" in the Journal of the AOA when I suggested that all professions were businesses and that optometrists needed to understand the fundamentals of business if their practices were to succeed. Something like that. I subtly suggested a magazine for this and Optometric Management was started by the publisher of Dental Management who read what I had written and saw what I suggested as new horizon. OM had a rocky beginning until early 1970 when I, and couple of others, bought the magazine and gave it a needed whiff of optometry. If you look at the optometric media today, you can see where we went with that then novel thought.

The second was even more profound. In 1977 at a meeting in NYC at the Plaza Hotel before 100+ representatives of the optical industry, I threw out the idea of holding a conference (really a trade show but I did not use that name) for optometrists, ophthalmologists, opticians, and techs in the Madison Square Garden...I even suggested in that speech that we include a frame fashion show for consumers! The idea was endorsed by the optical manufacturers/distributors but it was "poo-pooed" by my colleagues who thought I was out of my mind and would soon lose everything. Who in their right mind would ever consider a meeting of optometrists, ophthalmologists and opticians in the same room as the same time? Optifair was born that morning and the success was wonderful. We had 6511 people attend our first "show" -- and we did not count spouses or others not connected with the profession or industry. It was a new idea and in the beginning not a popular one with the leadership in optometry. However, success changed that as the magazine published positive thoughts and suggestions for our colleagues and Optifair was professionally done and professionally run.

Perhaps these personal stories will help you along the road ahead for your company.


Best wishes.

-Irving

Editor's note: For more optometric history spend an hour with Dr Irving Bennett being interviewed on ODwire.org Radio/Podcast...
https://www.odwire.org/threads/32-dr-irving-bennett-the-practice-management-legend-speaks.78873/
 
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Ed Makler

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I'm not an expert on web-design/management, but the Coastal.com site still advertises the first pair free promotion. They may have only controlled Coastal for the past few days, but they could have easily deep-sixed that promotion the second they were handed the keys to the car.

Please Essilor, no b.s. phrase that uses the term "unwinding".
 

Ed Makler

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I usually do not post on O.D. Wire, BUT, I felt Howard was very evasive.

I contacted him the next day and said since they only had owned Coastal for 48 hours he could only answer what he knew at the time.

Owning coastal puts Essilor in direct competition with optometrists.
The next day a received a letter from a medicaid insurance company saying we could no longer supply lenses and frames to their patients, but would have to order through an Essilor lab and the medicaid insurance company would give us $10 to order, check, dispense and service. Howard claimed he knew nothing about this program but did connect me with the CEO of the medicaid company.. However this puts Essilor in direct competition with the optometrist.

I think Dr. Purcell has a difficult job to be the optometrists voice and an Essilor employee. Obviously, Essilor does not care if they now compete with us at the retail level, but still expect us to place our orders for their products.
 

Craig Steinberg OD JD

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I usually do not post on O.D. Wire, BUT, I felt Howard was very evasive.

I contacted him the next day and said since they only had owned Coastal for 48 hours he could only answer what he knew at the time.

Owning coastal puts Essilor in direct competition with optometrists.
The next day a received a letter from a medicaid insurance company saying we could no longer supply lenses and frames to their patients, but would have to order through an Essilor lab and the medicaid insurance company would give us $10 to order, check, dispense and service. Howard claimed he knew nothing about this program but did connect me with the CEO of the medicaid company.. However this puts Essilor in direct competition with the optometrist.

I think Dr. Purcell has a difficult job to be the optometrists voice and an Essilor employee. Obviously, Essilor does not care if they now compete with us at the retail level, but still expect us to place our orders for their products.

This is sort of along the lines of my thinking. There are three possibilities. Either what Essilor has done will help independent optometrists, will not impact them, or will hurt them. If it is Essilor's view that them owning Coastal helps independent optometry, I'd like to hear from Essilor a simple and clear non-advertisement explanation of how it helps independent optometry.

Craig
 
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AdminWolf

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An Optometric Icon shares his reminiscences with Optifair was born that morning and the success was wonderful. We had 6511 people attend our first "show" -- and we did not count spouses or others not connected with the profession or industry. It was a new idea and in the beginning not a popular one with the leadership in optometry. However, success changed that as the magazine published positive thoughts and suggestions for our colleagues and Optifair was professionally done and professionally run.
https://www.odwire.org/threads/32-dr-irving-bennett-the-practice-management-legend-speaks.78873/

For those who don't know, Optifair became VisionExpo -- yes, that VisionExpo!
 

Ed Makler

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I'm not an expert on web-design/management, but the Coastal.com site still advertises the first pair free promotion. They may have only controlled Coastal for the past few days, but they could have easily deep-sixed that promotion the second they were handed the keys to the car.

Please Essilor, no b.s. phrase that uses the term "unwinding".
As of today, May 23, 2014, coastal still offers the first pair free. Dr. Purcell said he would get in touch with CEO.

Be aware the Essilor now owns Frames Direct and Coastal. They have also entered an agreement with Superior Opticare to supply frame and lenses from an Essilor selection and give the optometrist a $10 fee for handling the paper work, selection and dispensing and follow up. Essilor has done some great things for optometrists in the past, but now are doing things to hurt us.
 

Ed Makler

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The free pair option is still listed on the Coastal website and it was promoted on the Today show as a bargain option for glasses.
http://www.today.com/video/today/55561418
Dr. Howard Purcell, who I casually know, said he would check the free pair option about one month ago. He has a difficult position trying to represent independent ODs and working for a corporation that may or may not listen to his advice.

Essilor also owns frames direct
 

Kent Jensen

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I'm not an expert on web-design/management, but the Coastal.com site still advertises the first pair free promotion. They may have only controlled Coastal for the past few days, but they could have easily deep-sixed that promotion the second they were handed the keys to the car.

Please Essilor, no b.s. phrase that uses the term "unwinding".

July 3,2014 Coastal still advertising free pair of glasses
 

AdminWolf

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Update:

I received this letter today from Dr. Purcell:


Colleagues:

I want you to know that I (we) share your concern about the recent segment on the Today Show featuring the benefits of purchasing eyewear online through several e-commerce sites, including Coastal.com.

We are aware of an inconsistency in the messaging presented between the show and our recent industry webinar. To clarify specifically, as was presented in the webinar, Essilor discontinued the “first pair free” initiative in Canada on June 17, 2014, and will discontinue this program in the United States no later than July 31, 2014. Essilor believes the “first pair free” is counterintuitive to the value of eyewear and the role of the independent eyecare professional in dispensing these products.

To further clarify, all topics presented in the webinar are being addressed by Essilor and have a concrete date on the timeline of numerous changes being made to the Coastal business model. Visible changes to the language and messaging on the coastal.com website will be seen by July 11, 2014 and bricks and mortar store closures are already happening globally. While changes since the April acquisition may appear to be taking longer than anticipated, the number of adaptations being made to the Coastal business model requires a one-step-at-a-time approach. Essilor appreciates your patience as we continue to move forward in this process.

Yours sincerely,

hpsig.png


Howard B. Purcell, OD, FAAO

Senior Vice President, Essilor of America

214.496.4981

hpurcell@essilorusa.com
 
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Jeff Kiener

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What a red herring.

"Watch what the left hand is doing people...we're removing the free glasses offer."

("Don't look at what our right hand is doing. You wouldn't like that.")
 

AdminWolf

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What a red herring.

"Watch what the left hand is doing people...we're removing the free glasses offer."

("Don't look at what our right hand is doing. You wouldn't like that.")

Not sure I follow -- Looks like you've got a tangible date now to see these changes implemented. The 11th is what.. 3 days from now?

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Jeff Kiener

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I mean that no matter what essilor does "to clean up Coastal", the fact is, they bought it to run for profit.

If they were really going to "clean it up", they'd "close it down".
 

AdminWolf

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I mean that no matter what essilor does "to clean up Coastal", the fact is, they bought it to run for profit.

If they were really going to "clean it up", they'd "close it down".

Well, what they bought was a highly functional e-commerce platform, and a fulfillment center that is apparently very good at what they do. This is not trivial to set up.

How they use it going forward is the real issue. But saying that the Internet is just going to curl up and die isn't realistic in 2014 (unless Comcast and the other cable companies have their way, of course!)
 

Jeff Kiener

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Right is right, wrong is wrong.

The #1 lens manufacturer in the world is allowing patients to take their own pds, their own seg heights, choose whatever material they want, no age or occupational restrictions, the glasses will not be properly dispensed or double-checked, and it's in direct violation of many states' laws regulating vision correcting devices, and is against every professional organization.

Let alone the fact that the optical industry is supposed to be their customers, not direct-to-consumer.

It's a slap in the face.

AWF: edited to remove epithet after multiple user reports; please keep it clean, for the sake of my blood pressure. please, please please...
 
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AdminWolf

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The #1 lens manufacturer in the world is allowing patients to take their own pds, their own seg heights, choose whatever material they want, no age or occupational restrictions, the glasses will not be properly dispensed or double-checked, and it's in direct violation of many states' laws regulating vision correcting devices, and is against every professional organization.

Jeff, you are entitled to your opinion of course -- that's what the site is about.

But i'm asking you to look at the facts -- stripped of emotion. Look at what Essilor actually acquired, at the content of the webinar, and what is changing on the Coastal site -- that's what this thread is about. Not venting. Well, venting is always an option :)

Their primary customer is the optical industry -- they know this.

They acquired one of the few very successful e-commerce and fulfillment platforms -- one that happened to specialize in going DTC with eye wear, and doing it at low prices, making an end-run around the practitioner. Why?

E-commerce is not going away -- not now, not ever. That's why. This doesn't mean that the ECP needs to be cut-out. I repeat -- the internet doesn't have to be your mortal enemy.

I know this better than anyone, having built one of the first online systems for contact lens fulfillment (2003), designed expressly to prevent docs from getting shut out of the loop.

Our system could have been used -- easily -- as a 1-800 Contacts clone. Or an armada of 1-800 Contacts clones, for any joe who wanted to set up his own 1-800 Contacts and pay us rent! We didn't choose that path. But the technology itself could have been used either way -- it was totally up to us.

The system and business that Essilor acquired does NOT have to be used to hurt the practitioner. Quite the opposite, the system and their fulfillment processes are highly refined and could be used in ways that ultimately benefit the practitioner. Notice the changes that they are already making to the system (which Dr. Purcell mentioned in his letter today.)

If you hate something about the way Coastal runs, or want to find a way to make it better for the ECP, stomping your feet and screaming isn't going to work. Engaging with the company might. You have someone at the highest levels of the company who wants your direct feedback.

You think they are encouraging self-PD taking? Point out where it is happening on the site, let Howard know. It will not change if no one points it out.

If they are violating laws, again, point out examples -- even post the examples here! Don't make the assertion without some evidence. Change can't

You want to find ways to work with the system in your practice? Again, talk to Howard about it -- see what fits. Or not.

The technology itself is neither good, nor evil. It is the implementation that counts. Where Coastal and their platform goes in the future is what counts, and your voice is being heard -- trust me on that. Use it constructively...

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