Optical set to take on OPSM in Australia

New Zealand's biggest optical company, Visique network operator Optical Holdings, looks set to take on Australian heavyweight retailer OPSM on its own turf.

Optical Holdings has bought 50 per cent of Adelaide-based eyeware distribution company Engelhardt in what managing director Graeme Edmond calls a "beachhead" establishment in Australia.

"It's our establishment point from which we will look to see what other options may present in Australia," said Edmond, formerly chief executive of the then Auckland District Health Board.

He declined to discuss Optical Holdings' plans but did not rule out taking the Visique brand into Australia. "Anything is possible."

The company did not want to "trumpet" its move into Australia, given the spectacular failure of some other New Zealand ventures there.

"We will just get to better know the Australian market. We are intent on not making the mistake of assuming the markets are exactly the same.

"But we want to exploit and utilise our international connections and deploy a lot of things we have learned in New Zealand and this is the starting vehicle for us to do this in Australia."

Edmond said the New Zealand retail optical market was worth about $65 million. That excluded sunglasses sales in route outlets such as service stations, and spectacle sales at The Warehouse.

Australia's market was worth nearly $400 million.

Rival OPSM has 35 stores here and 460 outlets in Australia. It bills itself as the leading optical retailer in Australasia.

OPSM was taken over last year by New York stock exchange-listed Luxottica Group, a global leader in design, manufacture, and distribution of prescription frames and sunglasses in the premium and luxury markets.

Visique is New Zealand's largest optical retail network. Its independent optometrist members own 60 per cent of the company and have more than 100 practices around the country.

As well as operating the Visique chain, Optical Holdings has subsidiaries offering IT solutions, optical service financing, and an optical equipment company. It has three frame and sunglasses distribution companies.

Its annual revenues had swelled in the past seven years from $5 million to just under $30 million through acquisitions and expanding products and services, "strictly" within the eyecare market, said Edmond.

The group employs around 70 people. The Visique business employs another 240, and its retail sales are not included in the $30 million revenues.

Edmond said growth, including the Engelhardt acquisition, had been funded from cashflow and borrowings.

Optical Holdings has 140 private shareholders, including the independent optometrists.

Edmond said it had moved across the Tasman despite having much still to do in New Zealand to expand the Visique group, improve its supply chain and create value for shareholders.

"But when we look to the medium term our opportunities for growth are limited. So we started to keep an eye out for options, and did quite a bit of research in the past three years around the world.

"Eyecare is a small industry, even though it's international. We all know each other.

"The world is getting smaller, and major suppliers of fashion brands and products look at Southeast Asia, North America and Australasia as groupings. OPSM operates here, so there's nothing surprising about a New Zealand company wanting to do it in reverse."

Optical Holdings would remain Auckland-based.

Edmond and Optical Holdings chairman Neil Richardson have joined the Engelhardt board.

"We will run [Engelhardt] for the foreseeable future exactly as it is," said Edmond.

He said that while the same products might be sold in Australia and New Zealand the way business was done across the Tasman was different.

Optical market (retail)

* New Zealand $65m
* Australia $400m