Growing demand for the more sophisticated lenses and prescription frames developed by the major international brands is rapidly changing the structure of the optical retail trade in Russia, driven by the country's booming economy and the development of new shopping centers. The first full-fledged modern chains have started to emerge in the last few years, and they are expanding at great speed.

The change has affected so far mainly the larger cities. At the end of 2007 the Russian eyewear market totaled 1,834 optical stores in the Federation's territory, mainly in the European part of Russia and in the major cities, with around 300 in Moscow and another 100 in the surrounding area. Saint Petersburg had 106 outlets, Krasdnodav 83, Samara on the banks of the Volga 50 and Kaliningrad, near the Baltic coast, 10. That makes over one-third of the total number of sales outlets for the immense territory of the Russian Federation concentrated in this handful of cities.

No comparable data could be obtained for previous years, but local industry officials say the current retail structure is still to a large extent the legacy of the so-called communal stores from the Soviet era, pharmacy-like shops that sold spectacles manufactured in antiquated Russian factories. After the fall of the communist regime, the entire network was privatized in 1991, and overnight the staff who had been running the outlets suddenly became their owners. In many cases some five or 10 stores in one city were coordinated by a member of the party who, once privatization became the rule, proclaimed himself owner of a mini-chain.

An individual entrepreneur may now own up to five of these stores at the most, but the vast majority are individually owned. They represent the medium level of the market, between the new chain stores at the top and the so-called ?kiosks? at the bottom. Four years ago there were still hundreds of little kiosks and other small shops selling pre-mounted spectacles in certain stations of the Moscow underground, in the open markets and other locations all over the city, but their number has dropped considerably since then, although they still represent a dominant retail format in smaller towns and in the southern part of the country.

To give an idea of the size of the market, Mark Mackenzie, who visited the country twice in 2004 and 2007, estimates that the total number of lenses sold in Russia has remained more or less stable at about 35 million units in volume, because while the population of Russia, last estimated at 140 million people, has been declining, average prices have gone up.

According to Mackenzie, a well-known international consultant in the sector, 15 million of those lenses were still used last year in 7.5 million pre-mounted spectacles. He estimates the more Western-like market for ophthalmic lenses, which are not pre-mounted, at 19 million-20 million units a year. It has been relatively stable overall, but the number of progressive lenses has increased rapidly in the last four years, reaching about 300,000 units, according to Mackenzie, with quality and price levels that are comparable to those of Western Europe.

According to Marina Tupikova, who studied the optical retail market in Moscow in 2004, kiosks and other small shops were then selling pre-mounted glasses for the equivalent of €3 a pair, made in the few surviving Russian factories or in Chinese sweatshops. In 2004 the turnover of this end of the market for the Moscow area was estimated at some $70 million a year, representing 35 percent of the market in value and 65 percent in volume. The prices of some of these glasses have increased in the last few years as the styles have become more fashionable, but the lenses are still very basic.

The old communal outlets and the new outlets recently opened in the numerous recently built shopping centers have better lenses and a wider selection of eyewear, sourced from Italy or Korea, and their prices are higher. According to Tupikova, in 2004 major Western eyewear brands were only available in Moscow from one store, Interoptica, that opened in 1994, three years after the fall of Communism. It remained for years the only source of decent eyewear, retailing at €100-€300 a pair, but there are now many other competitors.

Today, the top end of the market is represented by four or five modern eyewear chains with more than 20 stores currently totaling around 300 outlets. They all opened recently and are growing fast. Some of them belong to distributors of major European brands, mainly Italian ? all rushing to open new outlets. Growth in the past three to four years has been tremendous.

Ochkarik is the largest chain to date, with around 70 stores, mainly in Moscow, compared with only 14 doors in 2004. The stores have a supermarket-type format, selling at a wide range of price points from €15 up to €900. The most expensive models are purchased from the Russian distributors of the European brands or directly in Italy and Germany. The chain's mid-priced frames are made in China or Korea and the low-end models are mainly made in Russia.

The other major chain is LensMaster, in which Hal Investments acquired a 32.19 percent stake in 2004 when it had only 12 outlets. Another 12 were opened in 2005 and 16 in 2006, taking the total to 40. The tally at the end of 2007 was 60 stores, 20 of which are in Moscow. Sales amounted to €13 million in 2005, rising to almost double that figure at €24 million in 2006 thanks to the increase in the number of stores.

The Smotri chain has 69 outlets in the Federation, of which 20 are located in Moscow and 10 in Saint Petersburg. The chain started up in 2003 with three or four stores and has grown fast, with 30 new openings in 2007 alone. The target is to reach a total of 200 by 2009, which would make it the largest eyewear chain in the Federation. A franchising operation is also in the pipeline, with 700 stores currently undergoing screening to select the 100 best. The chain sold some 250,000 pairs of eyewear in 2007 ranging from €50-€100 a pair. Smotri belongs to Art Vision, one of the ten largest distributors of European brands in Russia.

The largest chain in Saint Petersburg is Nevskaya Optika, with a total of 70 stores. Roughly 30 percent of the models sold are European; the remainder are made in China.

VIP is another important chain, owned by Gregory Barinberg, exclusive distributor of Luxottica eyewear in Russia. It has 35 outlets, including 28 in Moscow and 4 in Saint Petersburg. Another retail player is Almas Holding with 25 doors, of which 20 operate in Moscow. Almas also distributes Italian brands such as Gattinoni and Renato Balestra (produced by Joves) and Coco Song. It also sells Shin Nippon and Briot ophthalmic equipment to Russian opticians.

Met at the recent annual MSOO fair, which has been held in Moscow for 12 years, industry officials said that the demand for prescription eyewear is far outstripping the demand for sunglasses in Russia, where there is little sunshine, although the fair has organized a dedicated exhibition for sunglasses in November for the past two years.

The quality of the corrective lenses is more important than the brand of the frames in determining price positioning in the eyewear sector. Russia still has some production of its own, but the lenses tend to be thick, heavy, fragile and easily scratched, and demand is consequently growing for more modern lenses from Japan, France and Germany.

Russian distributors of high-end lenses from abroad interviewed at the Moscow trade show gave impressive figures for their recent sales increases. The Russian distributor of Hoya lenses and CIBA Vision contact lenses, Grand Vision, said its total sales grew by 60 percent last year to the equivalent of $25 million.

Run by Irina Koshkina, the Russian Grand Vision has nothing to do with the French company by the same name. It has its own private label, Maxima. Some 65 percent of the company's sales are accounted for by contact lenses, mainly those of CIBA Vision. It sells Hoya lenses to around 700 outlets. The company is about to open a subsidiary in Kiev.

Essilor is making no secret of its intention to buy a local laboratory or to set one up in Russia in order to better capitalize on the growth of the market for value-added ophthalmic lenses. It currently works through five different distributors all over the Russian Federation.

Optic Dias and Luis Optica are the largest distributors of Essilor in Russia, selling the French group's equipment as well as its lenses. Optic Dias sells between 80,000 and 100,000 lenses a year to 1,300 optical stores in Russia, Kazakhstan and Ukraine, but Silhouette frames and sunglasses account for one-third of its turnover in Russia. The company also distributes Menrad's Jaguar brand of frames.

A dozen distributors supply the most important Western brands of prescription frames to Russian optical stores. Going by the brands on show at the Moscow fair, Russian eyewear imports break down into roughly 75 percent Italian, 15 percent French and 10 percent German. With a few noteworthy exceptions, Russian distributors are unwilling to disclose their figures to the international press, so the data given here are an indication of market trends based on our own observations.

We have already mentioned Luxottica, distributed by Barinberg, who also owns the VIP chain. Two other distributors, Exotica and Sover, share exclusivity for Safilo's brands. Exotica, run by Vladimir Meniaylenko, has Gucci, Diesel, Pierre Cardin and Yves Saint Laurent. Sover sells the Italian firm's other 25 brands including Armani, Dior, Hugo Boss and Max Mara. Sover is owned by the Italian entrepreneur Paolo Cannicci, and produces a number of brands under license as well as its private labels. It operates in Russia via its eponymous distribution company, which also has exclusive distribution of Viva eyewear, formerly with Marchon, and for some Marcolin brands.

Marcolin, like Safilo, has two exclusive distributors for the Russian market, with Sover responsible for five of its brands including Tom Ford and Roberto Cavalli. Its other six labels, which include Montblanc and Ferrari, are distributed by Bivision, a Russian firm that also distributes Indo and Vidivici. In 2007, Bivision sold 15,000 pairs of eyewear to 500 optical stores, increasing its turnover by 20 percent.

Bivision's owner has exclusive distribution for the majority of Allison's brands through another company by the name of Fashion Group, which claims to sell 30,000 pairs a year to 700 optical stores with prices ranging from €270 to €400. As for De Rigo, Irina Geriovtsova's New Optical has exclusivity for all the Italian manufacturer's brands on Russian territory.

Visibilia is distributed by Inveco, which also sells Pollini, Lacoste and Charmant. The distributor generates a full 20 percent of its total sales fromVisibilia's Ungaro brand alone. Inveco also owns Favory, a 20-outlet chain that operates exclusively in Moscow except for one store in Kiev, the largest eyewear store in the capital of Ukraine. Rodenstock is represented in Russia by Avvita, and the brand generates 75 percent of its annual turnover of about €1.5 million.

Art Vision, the company mentioned before as the owner of the Smotri chain, distributes L'Amy eyewear and the brands of a Spanish producer, Optim. It also has a house brand, Le Carré, made in Italy by Martini Occhialeria, which is currently doing well. The company now plans to launch the brand on the western European market and is looking for a distributor in Germany.

The MSOO fair, whose name stands for International Salon of Ophthalmologic Optics (sic), featured a few producers of frames from Russia and other Eastern European countries, which tend to use Italian brand names on their products for a touch of fashion. The biggest one is probably Sankt Luis Russia, a company that started off as a retail store in 1991 before beginning the production of medium-to-low-end eyewear for the Russian market in 1995 under its Italo-Chinese manager, Gianni Jang. Sankt Luis also distributes the optical accessories of Centro Style, the leading Italian firm. All its frames are sold under house brands that carry Italian names and are manufactured in China by four factories, one of which also produces for Safilo. The models are designed by a Russian designer who works with a colleague in China. The most expensive styles have a wholesale price of €30 and are sold to the public for €100-€120. The lower-end models have a wholesale price of €10 and retail at €50.

Another interesting eyewear producer at the Moscow show was EM Optic, the Russian subsidiary of New Line Optics in Prague. EM stands for Enni Marco, the brand name of its Italian-style prescription glasses and sunglasses, which are also sold in Germany, the USA, Canada and Mexico, among other markets. The group started operations 10 years ago, using manufacturers in Italy's Belluno district to produce models that would retail in the emerging Eastern European markets at €40-€60 a pair. The Russian subsidiary has direct responsibility for certain Enni Marco models developed specifically for the local market, all entirely made in Italy, but it also sells low-cost Hong Kong-made models, which account for 10 percent of its sales. Enni Marco also exhibits at Vision Expo in New York.