The concentration process goes on in Italy's highly fragmented optical retailing sector, where more than 70 small buying groups, some of which have only about 20 affiliated independent stores, split a small portion of the pie with a handful of integrated chains. A few days ago, two relatively large entities ? a cooperative called Free Optik and a limited partnership called Optotrades - decided to merge into a joint venture, forming a new buying group, named F&O, that represents a total of 457 independent stores.
Based in Bologna, which hosts the head office of Optotrades, F&0 will have its own executive team run by Anna Paola Ugolini, president of Optotrades, and by Sandro Kichelmacher, president of Free Optik. It will be the second-largest buying group in Italy in terms of affiliated points of sales after Vision Service, recently formed through another merger (see EWI #5 of May 2), which has about 600 stores. It will be slightly larger than two other groups of more than 400 stores, Oxo and GreenVision.
The main objective of the merger is obviously to obtain greater buying power. Economies of scale will result from the elimination of duplicate functions. F&O also intends to develop a strategy to help boost the sales of the affiliated stores and to recruit new retail members, offering them training services and the use of specific software.