The eyewear industry is recovering slowly from the shocking terrorist attacks on the symbols of American financial and military power of last Sept. 11, but there is still no accurate reading of their short-term and long-term impact on consumption patterns in our sector. The resulting wait-and-see attitude, compounded by the present pre-war atmosphere, is delaying and scaling down purchasing decisions throughout the supply chain, creating the danger of some isolated shortages further down the line if the uncertainty persists.
At first sight, sales of prescription lenses and contact lenses in the USA will likely be less affected than sales of less essential items such as ophthalmic frames or sunglasses, but some consumers may postpone elective procedures such as laser surgery on their eyes. In some rare cases, consumers may be tempted to fit the new lenses they need into an existing frame rather than to invest on a new one, or they may go for cheaper frames and do without special coatings.
According to industry executives, the higher end of sunglass and optical frame business will suffer the most, albeit not as much as furs, jewelry and other fashion products. While youngsters may continue to spend on trendy and sporty products, many older and more conservative consumers in the USA, and partly also elsewhere, may want to ban for a while anything ostentatious from their budgets, but the eyewear industry should not suffer excessively.
According to an Italian investment analyst, the tragic events of Sept. 11 in New York and Washington are just going to add a couple of percentage points to an already expected decline in the US market for frames and sunglasses. The US economy had already started to soften down earlier this year. US sales of these items were already down in units during the first half of 2001, while still showing a small increase in dollars, but the latest indicators on consumer confidence and spending indicated that the economy was already headed for a probable recession.
The immediate effect of the attacks on the Twin Towers and the Pentagon was horrible. Optical retailers' sales throughout the USA were virtually frozen during the first 7-10 days after the Sept. 11 massacre, with stores in the shopping malls and at airport locations affected the most, but their business has returned almost to normal. Buyers cancelled appointments with the suppliers and held up orders, but they started to come back to the market lately.
Suppliers are reassessing their business prospects. Many have told the factories that there will be further cutbacks in production. A group of Italian eyewear manufacturers from the Belluno region has called an emergency meeting next week to review the situation.
All the majors in the eyewear frame industry are predicting a softening in their recent strong growth rates. Safilo, which does almost half of its total business in the USA, has admitted that it's experiencing a curtailment in its orders, even in Europe. Marchon, the largest American supplier of frames, is expecting a more serious downturn in the USA than it had previously anticipated, without being able to quantify it Luxottica, which is also a major US retailer, anticipates only a small reduction in net profit for this year, indicating that only about 50 of its 1,500 Lenscrafters and Sunglass Hut stores in the USA are located in airports or shopping malls. Three of its stores were located in the World Trade Center, but its employees were safe.
The smaller suppliers will probably be affected more than the larger ones. Some of them were banking on the Sept. 20-23 International Vision Expo show in Las Vegas to meet key customers and agents, and to write orders, but the show was cancelled at the last minute, partly because of difficulties in air transportation and the inappropriately fun capital image of Las Vegas.
Some important meetings have been postponed to the Silmo fair, which will be held in Paris as scheduled next Oct. 19-22, but depending on the international situation, this increasingly important industry event may turn out to be relatively low-key because of the prevailing uncertainty and cutbacks in air travel by executives all over the world. Many suppliers know that they have to go see the customers themselves, especially in the USA, if they want the business.
Anyhow, the American Tragedy of Sept. 11 has triggered acts of solidarity from throughout the industry. Safilo donated about 2,250 Carrera and Smith goggles and sports shields as well as 2,600 tee shirts to the rescue volunteers, the firefighters and the investigators involved in operations in and around ground zero. Allergan, Bausch & Lomb and CIBA Vision sent over truckloads of saline eyewash and other products to relieve the severe eye irritation caused by the dust and debris from the wreckage of the Twin Towers in Manhattan. CIBA's parent company, Novartis, and other firms in the sector, including The Cooper Companies, organized blood drives.
The Vision Council of America has set up a special humanitarian relief fund for the families of the victims and the rescue workers, making an initial contribution of $50,000, equal to 10 percent of its annual membership dues (e-mail contact: firstname.lastname@example.org). It's calling on all the companies that were due to exhibit at IVE West to donate 10 percent of the money they had budgeted for floor space rental.
The September 11th Fund and/or the American Red Cross have received donations of $200,000 from the Corning Foundation, $5 million from Merck and $3 million from Novartis. Breitfeld & Schliekert, a German supplier of optical tools and past that set up a US subsidiary 6 months ago, pledged to donate 5 percent of all sales made through its www.sight-tools.com site from Sept. 24 to Oct. 31.
Marchon hastily recalled ads and TV spots for its Flexon frames that would have featured an airplane flying over the Empire State Building in New York. For its part, Johnson & Johnson acted as sole sponsor of a special commemorative issue of Newsweek magazine, titled "The Spirit of America" and published on Sept. 27, featuring a detailed account of the Sept. 11 attacks and its sequels. Newsweek will donate $1 for each issue sold to the September 11th Fund.