Franchising

Emerging Vision Eyes Growth in Franchising

 Vision Monday

September 12, 2005

Cathy Ciccolella, Senior Editor

GARDEN CITY, N.Y. -   After having completed a five-part “strategic reorganization plan” launched in 2002, Sterling Optical parent Emerging Vision is “more strongly positioned for future growth,” chief executive officer Chris Payan told stockholders at the company’s recent annual meeting.

Payan said Emerging Vision has worked to regain profitability, streamlined operations by reducing its corporate staff (by more than 50%) and lowering expenses, and strengthened its vendor relationships by cutting back to a core of vendors with which it does more business.

“The company was previously spread too thin in its resources, and in managing multiple businesses,” Payan told VM in an exclusive interview.  To alleviate that situation, Emerging Vision shut down its B2B Internet business and its laser-surgery operation, and closed 25 unprofitable stores.

“Getting smaller to get healthy is not an uncommon thing in the corporate world,” Payan noted.  “Now we’re well-positioned to grow and we’ll continue to grow in our core business, optical franchising.”

Toward that end, the company has improved enforcement of its franchise agreements with its existing Sterling and Site for Sore Eyes franchisees.  In the past 18 months it has also instituted a franchise audit function, to assure accurate reporting by franchisees.

“We’ve already audited a significant number of our stores, and our goal is to get through the entire chain,” Payan said.  “We may be stricter than in the past, but it’s more palatable to the franchisees because we’re treating everyone the same.”

Emerging Vision is also taking proactive steps – such as holding more individual and regional meetings with franchisees, expanding training opportunities and providing more field support – to enhance its relationship with the franchisees.

In terms of its vendor relationships, the company continues to evaluate its vendor partnerships after culling its vendor roster to a small group, Payan said.  “When we form a partnership with a vendor, its deal to us must be good, so we’re comfortable promoting that brand and pushing its product,” he told VM.  “The industry’s vendors have seen the strides the company has taken, and we’re now being approached by more vendors who want to work with us.”

“As a result of the successful execution of our five-part reorganization plan, we have streamlined our operations and returned the business to profitability,” Payan said.  “Additionally, we have established a healthy balance sheet and eliminated roughly all of our outstanding debt.”  The company’s debt now amounts to one $500,000 obligation due in 2007, he noted.

As for future growth, “We have a foundation established, with the operational flexibility to grow our business,” Payan declared.  He said future growth is likely to come in both new markets and through further penetration of the company’s existing markets.

“Our focus continues to be on the franchise side of the business, but we’re looking at every opportunity,” including possible acquisitions, he told VM.

At the meeting, Emerging Vision shareholders re-elected three directors to serve on the company’s board until the 2007 annual meeting: Harvey Ross, Seymour Siegel an