A global investment firm has acquired the US’s largest contact lens retailer 1-800 Contacts for a reported $AU4.2 billion.
The disruptive online retailer, which was launched out of a dorm room in 1995, announced the deal on 23 September with the investment company KKR.
The sale follows many years of strong growth and technology innovation for the vision brand, which was purchased by AEA Investors in 2016. Financial terms of the transaction were not disclosed, but Bloomberg valued the sale at US$3 billion (AU$4.2 b).
1-800 Contacts imposed itself on the US vision market, claiming it offered the first online platform for purchasing contact lenses. It’s also been involved in passing a federal law to give everyone the right to their own prescription and has battled with contact lens manufacturers over what it claims were anti-consumer pricing models.
Most notably, the company has expanded into technology that allows orders and eye tests to be conducted with smartphones. It acquired vision technology startup 6over6 in late 2019 and launched new app-based offerings including ExpressExam, which enables consumers to renew contact lens prescriptions online in minutes.
The company’s sister brand Liingo Eyewear also introduced Rx Reader, an app that extracts optical parameters directly from a pair of prescription glasses.
According to the company, as many Americans dealt with stay-at-home orders and business closures in response to COVID-19 earlier this year, many contact lens wearers visited the online store in place of traditional brick and mortar sellers.
During the peak of the shutdown, the company experienced a 100% year-over-year increase in new and returning customers. In that period, usage of the ExpressExam app also increased 200% and the Rx Reader app experienced a 700% increase in monthly active users.
“1-800 Contacts was founded 25 years ago to offer consumers a better way to buy contact lenses. Since the very beginning, we’ve kept the customer at the centre of everything we do,” Mr John Graham, CEO of 1-800 Contacts, said.
“It’s gratifying that KKR sees such incredible value in our brand and that they will continue to support us in doing what we do best – delivering the best vision care to consumers with the highest quality customer service.”
Mr Nate Taylor, KKR partner and co-head of Americas Private Equity, said 1-800 Contacts is a customer-centric, technology-enabled business that brings convenience to the optical space.
