Riding a new effort to reach more fashion-forward customers, Sunglass Hut just completed a two-year run of 32% comp gains in its North American stores, or about 16% a year.
On a conference call with analysts, Kerry Bradley, COO of Luxottica Retail North America, the parent company of Sunglass Hut, said the chain has been refining and evolving the Sunglass Hut store experience to better reach the fashion and luxury crowd, and also to reach more women.
“Five years ago when Luxottica acquired Sunglass Hut, it was really a male oriented brand where young men would come in off the beach and get their sport glasses,” commented Bradley. “And I think what's happened in just five years is that it's transformed now to where people who are fashion savvy and fashion oriented feel comfortable there. And where instead of everything being locked up under lock and key, you can come in, in an open sale environment and have a great time picking your new sunglasses.”
Sunglass Hut opened 90 new stores, closed 140, and remodeled 173 into the updated fashion look in North America in 2006. Given the strong trends, it plans to open 220 new stores in North America in 2007, including expansion into some department store settings. This also includes about 60 stores under a new format paying more attention to store windows and using shelves instead of racks to give the concept more of a “museum” look.
“We're finding that in North America that there is a latent demand for fashion, for luxury, and we just haven't been as quick to supply it as we needed to be and we're doing that in North America, but also around the world,” Bradley said.
About 180 remodels are planned in 2007. By the close of the fiscal year, about 55% of the total base in North America will have the updated fashion look.
Worldwide, Sunglass Hut has a goal of reaching around 800 million ($1.05 billion) and within three years expects Sunglass Hut will be over 1 billion ($1.3 billion) as a brand.
