Luxottica Group, S.p.A. (LUX)

Cole National. With the acquisition of Cole in October 2004, we acquired a group of distribution outlets and a provider and administrator of managed vision care services under one group. Cole through its wholly owned subsidiaries operates retail vision locations under the name “Pearle Vision” as well as under the names “Sears Optical,” “Target Optical” and “BJ’s Optical,” which we refer to as our Licensed Brands. It administers managed vision care programs and benefits previously sold through the Cole Managed Vision Division; renewals and new sales will be through Eyemed Visioncare. Additionally, Cole National operates a chain of personalized gift stores, e-commerce and catalogs under the name “Things Remembered.”  The licensed brands (Sears, Target and BJ’s) optical retail locations are located in the host stores that bear their names. Pearle Vision stores are mostly located in strip malls outside of the conventional malls where most LensCrafters and Sunglass Hut stores are located. In addition, we have franchised Pearle Vision locations located throughout North America. The Company believes that its combination with Cole will:

•                    strengthen its retail operations in the United States;

•                    strengthen its managed vision care business by increasing the number of people for whom it provides managed vision care benefits as well as by adding well established retailers to its existing family of retailers; and

•                    provide the Company with the opportunity to increase its sales of frames manufactured by the Company in Cole retail stores.

The Company has nearly completed its strategic integration plan with respect to Cole. See Item 5—“Operating and Financial Review and Prospects—Overview” for more information. As of December 31, 2005, Cole operated about 2,400 owned and leased department locations and over 450 franchise locations throughout North America as of December 31, 2005.

We will continue to look to expand our retail operations in North America through opening of new stores or kiosks, or strategic acquisitions when we deem them to be appropriate.

Cole National. With the acquisition of Cole in October 2004, we aquired a group of distribution outlets and a provider and administrator of managed vision care services under one group.  Cole through its wholly owned subsidiaries operates retail vision locations under the names “Pearle Vision,” “Sears Optical,” “Target Optical” and “BJ’s Optical.”  It operates managed vision care programs primarily through Cole Managed Vision.  Additionally, Cole National operates a chain of personalized gift stores, e-commerce and catalogs under the name “Things Remembered.”  The licensed brands (Sears, Target and BJ’s) optical retail locations are located in the host stores that bear their names.  Pearle Vision stores are mostly located in strip malls outside of the conventional malls where most LensCrafters and Sunglass Hut stores are located.  In addition, we have franchised Pearle Vision locations located throughout North America. The Company believes that its combination with Cole will:

 

•                  strengthen its retail operations in the United States;

 

•                  strengthen its managed vision care business by increasing the number of people for whom it provides managed vision care benefits as well as by adding well established retailers to its existing family of retailers; and

 

•                  provide the Company with the opportunity to increase its sales of frames manufactured by the Company in Cole retail stores.

 

The Company has begun to implement its strategic integration plan with respect to Cole.  See Item 5—“Operating and Financial Review and Prospects—Overview” for more information. Cole operated over 2,400 owned and leased department locations and over 500 franchise locations throughout North America as of December 31, 2004.

 

We will continue to look to expand our retail operations in North America through opening of new stores or kiosks, or strategic acquisitions when we deem them to be appropriate.