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As the government ponders the merger of Twinsburg's Cole National Corp. with Italian optical retailer Luxottica Group S.p.A., what remains to be seen is whether two dueling brands can survive the process.
In the roughly $16.5 billion U.S. retail eyewear market, Luxottica's LensCrafters and Cole's Pearle Vision are Nos. 1 and 2, respectively. They are to frames what Pepsi and Coke are to soda. With about $2 billion in revenue between the two, LensCrafters and Pearle Vision control between 10% and 15% of the retail market.
Analysts who have followed the takeover since its early stages said it will be vital for Luxottica to differentiate between the two retail outlets to keep both alive and thriving.
If the Federal Trade Commission approves the deal, it would cost Luxottica $461 million, or $27.50 per share. That figure eclipsed the Italian company's initial offer of $401 million and a subsequent $419 million bid from Hong Kong's Moulin International Holdings. As such, analysts said Luxottica would have to restructure its retail interest creatively to get its money's worth on the deal.
"There's always a chance the FTC will ask them to divest a certain number of locations," said Jeff Stein, an analyst...