In the last couple of weeks, the Krys Group, Optic 2000 and Afflelou, three of the main retail players in France totaling more than 3,000 stores and an aggregated market share estimated at between 35 and 40 percent, reported drops in revenues varying from 8.5 percent to 10 percent for 2020. According to a GFK report released earlier this year, the French optical market went down by 11 percent in 2020, indicating that the three chains slightly improved their market share in a year that was marked by both the Covid-19 crisis and the completion of the French national eyecare reform.
In more details, shops of the Krys Group registered aggregated revenues of €1,015 million in 2020, including VAT but excluding sales of its 176 hearing aids stores and corners, representing a drop of 9.8 percent as compared to 2019. In France, total sales generated by the group’s stores went down by 9.5 percent year-on-year to €995 million. Calculated on the basis of GFK figures for the total market, the company said that it consolidated its leadership in the French market in 2020, increasing its market share by 0.4 percentage points to 15.8 percent. In the same period, the group opened a total of 35 stores, including 32 in France. Overall, the total number of retail locations at the end of the year reached 1,433 units, or thirteen more than a year before.
While the Krys banner remains the main strategic asset for the company, it has decided to review the other retail brands in its portfolio as part of its Vision 2025 transformation plan. The low-cost Lynx Optique banner, which includes about 100 shops in France, is being rebranded as Lynx You Do with an increased focus on e-commerce. The bigger Vision Plus chain, with more than 350 stores, is changing its name to the Collectif des Lunetiers and positioning itself as the optical store next door, promising geographical and relational proximity. The group also said that it would develop new credit facilities for the purchase of eyewear across all its banners, in particular to address the needs of young consumers.
The Krys Group central structure, which includes the logistics and production unit Codir as well as other services related to the banners’ management and marketing, registered a 9.4 percent year-on-year drop in revenues to €208.9 million and an EBITDA margin of 3.0 percent, or 3.3 percentage points less than in the previous year. Revenues of Codir went down by 5.1 percent year-on-year to €128 million at the end of September 2020, mostly because the activity was stopped for two months during the first Covid-19 wave in the spring. The group kept investing in the production facility last year, boosting its capacity by 30 percent and recently announced plans for another extension by 2023.
Optic 2000, also a voluntary retail chain, announced that its revenues in France went down by 10.1 percent year-on-year to €797 million including VAT, a performance similar to Krys Group. Besides the consequences of Covid-19 and the national eyecare reform, Optic 2000 also mentioned a 27 percent drop in revenues in January 2020 due to a major technical bug related to the reform which impacted most retailers in the country at the start of the year. At the end of 2020, there were 1,148 stores trading under the Optic 2000 retail brand, or five less than a year before.
In the course of last year and in order to address the health care concerns of French consumers, Optic 2000 implemented new services on its website, notably the possibility to book an in-store appointment at any of its retail locations, resulting in more than 810,000 appointments made between May and December 2020. The website, which has also been revamped to optimize smartphone navigation, virtual try-on and presentation of the eyewear brands, will propose a home delivery service for 1,200 SKUs, including contact lenses, from September this year. The company is also extending its Optic 2000 à Domicile service, which consists in opticians visiting consumers at their home to address their prescription eyewear needs. This option is now available in 81 percent of its stores.
Afflelou, the retail chain of mostly franchised stores, reported a 6.4 percent year-on-year increase in its network revenues to €209.1 million excluding VAT for the second quarter of its 2020/2021 financial year ending in July. Network revenues include sales of the directly owned stores and sales reported on the monthly basis by the franchises.
The positive quarterly performance was largely fueled by a 5.7 percent hike in comparable stores sales. For the last six months, overall revenues reached €428.8 million, increasing 10.5 percent from the same period in the previous year which confirms Afflelou’s strong recovery in the second half of the 2020 calendar year. Consequently, the group managed to limit the decrease of its revenues for 2020 to 8.3 percent year-on-year, reaching €804.6 million.
By region and for the quarter, sales in France outperformed the rest of the company’s business, increasing by 8.6 percent year-on-year thanks in part to a 25 percent jump in hearing aids revenues that contributed to offset the negative impact of new restrictive measures linked to the Covid-19 crisis. Since mid-January 2021 in particular, all optical stores located in large shopping malls in France have been required to close temporarily. About 15 to 20 percent of Afflelou retail locations are concerned by this new regulation. However, the company notes that regular consumers of these closed stores have taken their optical prescriptions to other Afflelou stores nearby, boosting their revenues by 10 to 15 percent. In the last full financial year, France accounted for roughly 78 percent of the group’s overall revenues.
In Spain, Q2 sales in 2020 declined by 2.2 percent as compared to the same quarter in 2019, partly because of the unusual heavy snowfall in the Madrid region in last January. The country weights about 15 percent of the total group’s business. Revenues in the other countries increased by 2.7 percent year-on-year, driven by a strong performance in Belgium. At the end of the quarter, the company operated a total of 1,435 shops, a net increase of eighteen stores from a year before.
At €26.2 million for the quarter ending Jan. 31, 2021, adjusted EBITDA for the whole group was stable as compared to the same period in the previous year. For the last six months, it increased by 9.9 percent year-on-year to €52.4 million. Quarterly regional adjusted EBITDA figures for France and the Other Countries segment remained almost unchanged at €21.3 million and €0.8 million, respectively, while it declined by €0.7 million to €4.1 million for Spain. The group reduced its net debt from €436.6 million on July 31, 2020, to €399.2 million on Jan. 31, 2021.