In 2006, Vision Service, an important Italian buying group, and the big Salmoiraghi & Viganò chain had established a joint entity, Kentral, to increase their buying power. However, their combination, with total retail sales of €120 million in 2010, has failed to produce the expected benefits, in spite an improvement in margins of 10 percent on the products they were ordering together.
The Kentral project was considered have reached a stage of maturity as the amount of purchasing and reorders had reached the same level as that of the Salmoiraghi chain alone. The next step would have been to centralize the distribution of the jointly purchased items for all the 1,300 outlets affiliated with the two partners, but a feasibility study came to the conclusion that the structural differences between the integrated Salmoiraghi chain and the looser Vision Service buying group posed too great a problem due to the relative autonomy of the latter's retail members.
Consequently, the Vision Service and Salmoiraghi have gone back to managing their business within the eyewear industry separately. Instead, Vision Service, which strongest in the northern part of Italy, has decided to join forces with another dynamic Italian buying group, Vision Is, which is particularly strong in the Center and the South of the country. As detailed in our issue of last Dec. 17, which mentioned many of its new initiatives, the members of Vision Is have almost 500 stores whose sales have been averaging around €285,000 a year.
Vision Service and Vision Is have established a new joint venture, called Vision Group, representing their 1,400 affiliated optical centers throughout Italy. The new group claims a market share of over 10 percent in almost all the regions of Italy; there are just three regions where the group's combined share falls below 10 percent, and a number of others where it exceeds 20 percent market penetration.
Headed up by Marco Procacciante, who has been running Vision Service, the new joint venture became operational last month, with exchanges of shares and members of their boards of directors. Within two or three years, the two buying groups should be fully merged, if their cooperation proves effective, but their respective banners and logos will be preserved. Vision Service trades in Italy through three different brands and banners ? Vision Service, Eurovista and Visionottica.
Vision Service has left Kentral, which will no longer serve as a purchasing agent for the Italian market, but the new Vision Group will probably continue like Salmoiraghi to purchase products as special conditions from some suppliers at the European level through Garro. This European entity was established in 2006 by Kentral together with Guilde des Lunetiers, the French buying group now called Krys Group, and the Spanish-based Cione group.
Garro would thus continue to represent a total of some 6,000 optical retail outlets in Europe. After the recent economic recession, it is currently revising its strategies, proposing new initiatives such as marketing programs to support the sale of exclusive lines negotiated with the producers.
On the other hand, Kentral will continue to contribute to the modernization of Italy's optical retail trade, especially by improving the efficiency of relations between manufacturing and distribution. It has already established a cooperation in this respect with an association of eyewear manufacturers in Italy's Belluno district.