Big Suitors for LensCrafters Seen : Sears, British Company Mentioned as Possible Buyers

With U.S. Shoe Corp. considering the sale of its fast growing LensCrafters optical “superstore” chain, Wall Street is speculating that Sears, Roebuck & Co. and Britain’s Grand Metropolitan PLC will be among possible suitors.

Last week, U.S. Shoe, the Cincinnati-based specialty retailer and shoe manufacturer, announced that it was considering selling all or part of the company, including LensCrafters.

At stake are 255 optical superstores, a growing part of the $11.2-billion optical retail market. Superstores are larger than conventional eye wear stores, offering a wider array of glasses and in most cases in-store labs to assemble eyeglasses in one hour or a day.

$1.5 Million Per Store

Based on the previous sales of superstores, analysts said Cincinnati-based LensCrafters could be sold for up to $400 million, or roughly $1.5 million per store.

Dean Butler, former president and chief executive of the unit who started E.D.B. Holdings in Milford, Ohio, earlier this year, is also an interested suitor.

“We have a preliminary interest as I am sure others have and we will look at it,” said Butler, who started LensCrafters in 1982 and sold it to U.S. Shoe in 1984 for undisclosed terms.

“But we have not made or bid for LensCrafters,” Butler said.

Sears, which owns Eyecare Centers of America and is interested in specialty retailing, said it would not comment.

Largest Retailer

Ian Martin, chief executive of Grand Metropolitan PLC’s U.S. unit, said in an interview last month that Grand Met is interested in more acquisitions in the optical business.

Grand Metropolitan owns Pearle Health Services Inc., the largest eye wear retailer with 1,400 franchised and company-owned stores, which Grand Met acquired in 1985.

“If we could bring LensCrafters into the business, it would be of interest,” Martin said during the interview.

U.S. Shoe has not disclosed LensCrafters’ profits, but analysts said the unit had $300 million in sales last year.

“Management has said LensCrafters had profits in the single-digit level in 1987 and that they are hoping to double that this year,” said Barry Bryant, analyst with Drexel Burnham Lambert.

Industry Blossomed

The retail optical industry blossomed in the early 1980s after federal laws allowed opticians to advertise.

In 1978, a law was also passed allowing opticians to give copies of eyeglass prescriptions to their patients. These events led to the commercialization of the retail eye wear business. Superstores did not emerge until about 1982.

Retail eye wear chains now control about 30% of the U.S. industry, said James Tenser of 20/20 Optical Group, which publishes trade magazines on the eye wear industry.

Superstores, Tenser said, make up about 8% of the chain total. “There is no question that the optical chains are gobbling up market share, and superstores are a prime moving force in the market,” said Tenser.

Despite the growth of superstores, some analysts are skeptical of their profitability. “It takes a lot of money to build the stores and advertising costs are enormous,” said Dennis Telzrow, analyst with Eppler, Guerin and Turner.