LM Chabot/l'Éloi
The first thing you notice about Antoine Amiel is his eyes. Which is entirely appropriate, given his line of work. They’re big. And blue. Maybe steel blue or cerulean, according to Crayola’s universally popular colour charts. They’re the kind of eyes other human beings wish they had. Well, except for the correction. His prescription is -6, which means he’s someone with high nearsightedness. Add to that high astigmatism, keratoconus and your normal level of presbyopia that comes with middle age—all of which Amiel readily acknowledges during a meeting at New Look Vision’s headquarters in Montreal in early March. “Nothing bad,” he says, chuckling in his self-deprecating way.
Keratoconus, incidentally, is a condition whereby your cornea—the dome-shaped front surface of your eye—gets thinner and bulges out into a cone shape over time. And it tells you a lot about Amiel, New Look’s chief executive and the chief architect of the glasses retailer’s dazzling growth over the past eight years, that he sees it as a resource as much as a complication.
As we walk toward his decidedly non-fancy corner office, he reveals that he uses the keratoconus as a way to assess the skills of the eye doctors working for New Look’s potential takeover targets. His MO: Pose as a patient and go for an eye exam with an optometrist who’s received high praise from a seller. If the specialist detects it, that’s good. Miss it, as some do, and the entire takeover can be thrown into question. As Amiel explains: “If the seller gives you a raving review of his star opto…and he is wrong about that, what else is he going to be wrong about?”
It’s just one of the clever tactics in the arsenal of the Paris-born corporate finance whiz, who has transformed New Look from a snoozy regional retailer into Canada’s biggest optical chain. Since he joined the company in 2012 as vice-chair and head of strategy (becoming CEO three years later), New Look has steadily gobbled up competitors across the country while building same-store sales. Before COVID-19 hit, the company had tallied organic growth over 22 straight quarters. Its share price has nearly quadrupled since Amiel started.
The global eyewear industry is roughly the same size as skincare, with sales forecasted to top US$130 billion this year. It is a market dominated by independent, single-store operators and one multibrand mammoth, French-Italian multinational EssilorLuxottica, which controls the Ray-Ban, Clearly and LensCrafters banners, among others, and is weighing the purchase of Dutch giant GrandVision. New Look is the only one of the top 15 players to operate in a home market of fewer than 100 million people.
New Look was a solid retailer before, but Amiel seems to have given it a fresh life and purpose. It might not be defined by a “cult of the CEO” in the same way as Elon Musk’s Tesla or Apple under Steve Jobs. But its success is tightly tied to his leadership. He’s a key reason firms like Mawer Investment Management became New Look shareholders. And he’s a main attraction for U.S. private equity firm FFL Partners and pension fund Caisse de dépôt et placement du Québec, which unveiled a proposal in March to buy New Look for $800 million and take it private.
The CEO is looking deeply inward at how to make the company more profitable and relevant—a perfectionist intent on using technology and a committed workforce to deliver a near-flawless pair of glasses and customer experience unmatched by low-cost rivals. He’s also looking far out at what New Look could become. And his ambition for the company—to one day challenge for the No. 2 spot among global eyewear retailers, up from 14th place—is much bigger than anyone previously imagined.
“Most of us [working here] go home every night thinking, Hey, we had the chance to change the lives of 3,000 Canadians today,” Amiel says, reflecting on his personal motivation and the ambition felt by New Look’s employees. “Maybe we screwed up a few, or they didn’t need a prescription. But this is the mood. An eye examination is a chance to change a life. It sounds pompous. It sounds like a brain surgeon almost. But this is what it is.”
Those inside and outside the company describe the 52-year-old polyglot executive as a locomotive—a methodical, data-driven leader who works so hard his peers have been known to tell him to slow down. They say years in the optical industry has given Amiel an instinctual feel for both the day-to-day operational intricacies of the business and the big-picture strategies to pursue. He understands how to make eyewear factories operate as well as he understands how to sell the product. He can read the global landscape without losing sight of local markets. And it’s all informed by a sensitivity gained from his experience living on three continents. Like crosstown retail compatriot Alain Bouchard of Alimentation Couche-Tard, he never does an acquisition without visiting the retail locations and talking to as many staff members as he can. Like Bouchard, his vision stretches far beyond the sometimes parochial walls of Quebec Inc.
When Amiel first set his sights on New Look around 2010, he wanted to buy it outright. He was in his early 40s at the time, an already accomplished executive with the Japanese optics giant Nikon, leading its North American and U.K. lens supply business.
Preparing to be called back to Japan and not thrilled by the prospect of waiting years at Nikon’s head office to obtain the same level of managerial freedom he had, he pivoted from wholesale to retail (it’s “a bit more exciting”) and got serious about New Look, then a tiny optical chain operating in one of the most profitable and least competitive markets in the world: Quebec.
New Look chair John Bennett, a low-profile merchant banker who is the company’s biggest shareholder, with a roughly 35% stake, asked Amiel what he’d do with it. The Frenchman outlined his thoughts for leveraging and expanding it profitably, to which Bennett said: “Well, that’s fascinating. Come back with the money, young man,” Amiel recalls. It took Amiel several months to find the right Bay Street backer, after which another informal approach was made to Bennett. But the chats never really went anywhere, and the whole deal never got serious.
“He called me one day and said, ‘Forget the Toronto boys. Come work for me,’” says Amiel. “I was a bit pissed off. It took a couple more years for him to attract me in, but that’s how it came to be.”
Any bitterness he might have taken from that experience has long since vanished, much like his penchant for fuelling himself during those early days at New Look with fridges stocked with Red Bull. Today, Amiel—a father of three who’s built a bit like a rugby scrum half—seems squarely focused on the future. Technology and further ownership consolidation, he says, will change the face of the optical industry in the years to come. Already, New Look is taking major steps toward implementing virtual face scanning that will deliver better-fitting glasses and planning for a day when it can manufacture a big percentage of its own frames in-house, instead of having to source them from China. Within five years, he predicts, it will likely be possible for a customer to have their eyes examined, get fitted for frames, and order and receive them—all without leaving home. “It would mean a webcam would be precise enough to do a medical examination,” says Amiel. “There are major technological challenges. There will also be many regulatory challenges. But it will eventually come.”
More than 60% of Canadian adults over 18 use vision correction. And for now, any of them who order glasses from a New Look–owned store most likely end up with lenses made at the company’s headquarters and main manufacturing facility in Saint-Laurent, a stark, two-storey concrete slab of a building spread over 60,000 square feet near Montréal-Trudeau airport.
This is the second-biggest lens-making factory in Canada, behind Essilor’s Toronto facility. And if you’ve ever had an eye exam and talked with an optician about lens and frame options, only to balk at the final price, you have to understand why they cost hundreds of dollars for this level of quality. Manufacturing glasses is surprisingly complex.
The peculiarity of the process begins near the front door, with a machine installed as part of COVID-19 safety protocols. You stick your arms in two tubes that make up a mandatory automatic handwasher, which lathers and rinses in a few seconds. The purpose is to lower the risk of bringing in any contaminants that could threaten the round-the-clock operation. “An epidemic [in the factory] would be catastrophic for us,” Amiel says.
Inside, the space is divided into process-specific stations, with roughly 130 people rotating through three shifts. Lenses arrive from the supplier in a semi-finished state and look a bit like clear plastic hockey pucks. After the lenses are set for handling, computer numerical control (CNC) machines called generators grind away material from the back of each lens, with an imbedded diamond knife hitting the plastic about one million times to create the desired thickness and prescription. Polishing, engraving and photographing for quality control follow, after which the lenses are inspected once more before receiving the proper prescription and cosmetic for the future wearer.
LM CHABOT/l'Éloi
There’s lots of stainless steel, and everyone is wearing a white lab coat. But it all feels a bit more free-flowing than other manufacturing facilities. If an order is cancelled mid-process, the lenses are scrapped outright because the chance they’ll fit someone else is remote. “The thing about optical production is that these are not very stable processes,” Amiel says. “The yield goes up and down, and every job is custom. We really make 3,000 different items a day on a very tight timeline. There’s a bit of chaos built into the thing.”
Unlike some of its rivals, New Look does not sell glasses without anti-scratch protection. So the lenses go to a multistage dip bath, where they receive a baked-on layer of varnish. Then it’s off for anti-reflection coating, in which an ion gun zaps each lens with a cocktail of silica materials in a vacuum-sealed chamber. The TV news is full of bespectacled people who haven’t paid for this option, Amiel says almost disapprovingly—you see mirrors where their eyes should be. The exact shape and measure of the frame is then taken, and the lenses are cut, or “edged,” for a proper fit.
Throughout the plant, there are sounds of machines drilling, hissing and beeping, of water and oil whooshing through a closed-loop recycling system instead of draining into municipal sewer lines. But the most intriguing spot of all is also the most silent. In the mounting area, a handful of individuals sit isolated from one another in low-walled pods and, in deep concentration, delicately snap lenses into frames by hand and fine-tune the assembled prize as if they were solving a continuous series of Rubik’s Cubes. Here, dexterity is king—there’s not a machine to be seen.
Every pair of lenses in the New Look factory is mounted into its frame by hand. Because the chance of breakage is so high, this is one process that simply can’t be automated, Amiel says. Every lens varies in thickness and diameter. And the workers have to apply just the right amount of pressure to fit it properly in the frame without dislodging the coating. The basics of the job can be learned in three months, but the best workers have been doing it for upwards of a quarter-century.
A pair of glasses goes from order to ready for pickup in-store in about six days. New Look sells contact lenses, too, but they’re ordered directly from the manufacturer. That’s more of a commodity business, and the profit margins are lower, Amiel says.
The vast majority of frames being mounted here are made in China, and typically 15% of them are unsold at the end of each season. Some of those are donated to people in need, but an estimated 5% end up in recycling centres or landfills. Amiel is hatching plans to cut New Look’s reliance on these Asian imports. He wants to start making frames in the lens factory with proprietary technology scaled up from Topology, a bespoke glasses maker based in San Francisco.
New Look has a major investment in Topology and exclusive rights to use its technical know-how in Canada. Amiel estimates 30% of the frames the company sources from China could be made in-house within five years on the same machines it currently uses. The goal: to improve quality and bring made-to-fit to the masses.
“This is going to be the next breakthrough,” he says. “From a financial point of view it will be great—less inventory, less shipping, less duty. But beyond that, for society, I think this is the way frames should be made.”
The vast majority of glasses in the world today are mass manufactured to fit a perfectly symmetric face that, for the most part, doesn’t exist. From the size of our nose bridges to the location of our ears, not many of us are perfectly proportioned. Add to that the sheer variety in individual vision correction, and you have a high probability of being let down in your eyewear shopping experience, especially if you buy online.
Retailers like Warby Parker mitigate this problem by shipping its customers several pairs to try before buying. Others that offer glasses for under $100 are likely betting people care less about the fit if the price is cheap. And you can always go to a bricks-and-mortar optometrist, many of whom will adjust mail-order specs. Amiel has a different view: He wants to get the fit as perfect as possible off the bat and offer customers a pair of glasses online with the same quality as those bought in-store—something that’s been little more than a pipe dream until now.
Late last year, New Look launched an augmented-reality software application to push this tailor-made strategy. Using 3D depth-sensor technology developed by Topology, it scans 20,000 data points on a person’s face in order to build an ultra-accurate portrait that’s precise to fractions of a millimetre. Customers take a video selfie, and after the exact measurements are achieved, they can try on different models of glasses and tweak them to suit their vision needs and tastes. The company is readying a more sweeping rollout of the technology this spring.
To place lenses in a frame, you need six very precise measurements, including the distance between the lower rim of the frame and your pupil, Amiel explains. And that’s frame-specific. What New Look brings to the market with Topology tech is the ability for people to buy or replace their eyewear without coming into a store for the two years the prescription is valid. The partnership with Topology is the backbone of New Look’s organic growth plans. The goal: to offer customers the same experience online as they can get in-store, at the same price.
LM Chabot/l'Éloi
Online retailers came into the optical trade about 15 years ago with the assumption that glasses were too expensive, technology could make them cheaper and everything could be done online, Amiel says. “None of that has come to be true. Glasses are not too expensive to do a proper job. Not everything can be done outside a store. And because the [online guys] came in with this price of $100 or $150 a pair, they’ve been stuck in the discount segment.”
Once virtual face measurement is perfected, the next major advancement will be delivering refraction testing remotely. That’s when the doctor makes you look at a chart, puts different lenses in front of your eyes, and asks “better” or “worse” in order to figure out your prescription. Amiel predicts that will be available online within two years. A complete eye exam is the ultimate step toward a fully online experience.
Just as technology is freeing the eyewear customer from having to spend hours in-store, going private, if the proposal is approved, will likely free New Look to make acquisitions at a pace and size it never dared as a public company. Amiel’s first acquisition was Vogue Optical, an Atlantic Canada chain with a ubiquity rivalling Tim Hortons. Despite the region’s challenging employment levels and incomes, Vogue’s employees are “completely committed,” and the purchase has delivered in spades, he says.
The acquisitions of Greiche & Scaff, Forward Vision, Visions Optical and IRIS followed, in addition to a few independents. In 2020, New Look dipped its feet into the U.S. market with its purchase of Edward Beiner, a Miami-based purveyor of eyewear that can cost thousands of dollars (think glasses made of high-grade titanium and finished with real gold). The deal closed just as the World Health Organization declared a global pandemic.
“His No. 1 concern was our employees. He knew very well that in the luxury world, it’s about location, product and personnel. You need to have the right people to be able to sell these glasses,” says the Brazilian-born Beiner, who runs the 12-store chain that bears his name. Beiner reopened his outlets in May 2020. Sales that month were down 24% year over year but started picking up fast. He remembers a Zoom meeting with Amiel and New Look finance chief Tania Clarke in early summer during which he asked for more inventory, particularly for brands like Cartier and Jacques Marie Mage. “Those big blue eyes were staring at me,” says Beiner. “I’m saying, ‘I need more product,’ and he’s looking at me like, Are you nuts? There was this pause. And then he said ‘Do you believe in it?’ And I said, ‘Absolutely.’ And he said ‘Okay, do what you have to do.’”
New Look is coming out of COVID-19 with record revenue as it benefits from pent-up demand and increases its market share. The company’s EBITDA margin in the third quarter was 39%, which could signal a new profit “paradigm,” says Beacon Securities analyst Doug Cooper, who raised his 12-month price target on the stock in November to $55.
But a stock that barely traded will likely soon not trade at all. New Look discreetly began a formal process last year to seek new ownership willing to take its business to the next level. Under the proposed deal announced in March, FFL and the Caisse de dépôt will take over the company and bankroll its effort to further consolidate the Canadian market and build its U.S. footprint, Amiel says. After that, there might be some “fairly big” overseas opportunities if more retailers become available and EssilorLuxottica meets antitrust resistance trying to buy them.
It’s clear some of New Look’s current investors are skittish about the prospect of such a transformative acquisition. (“That scares me,” says Mawer portfolio manager Jeff Mo.) But others applaud Amiel’s moxie and say the retailer has outgrown the usefulness of the Canadian public market. New ownership brings access to bigger pools of capital. And that’s necessary if New Look wants to play on the global stage.
The CEO will benefit from a few tailwinds as he grows the company, including a pilot project to sell hearing aids and other high-margin ancillary products. As he told shareholders in his last annual report letter: Humans’ aging process triggers near-vision loss from the late 40s and hearing deficiency from the early 60s. These age groups will expand at twice the rate of the general population for the coming decade. That’s supplemented by a worldwide myopia epidemic stemming from increased screen time and other lifestyle changes among younger people. Starting with the millennials, people need vision correction earlier.
But the competition isn’t letting up. Many independent operators are carving out strong retail niches serving specific markets and ethnic groups. New disruptors like Australia’s Dresden Vision, which sells single-vision lenses and frames starting at US$35 that customers assemble themselves, are determined to shake up established players. And online retailers like Vancouver-based Clearly, owned by EssilorLuxottica, will only get better. Will Amiel be able to meet the challenge? The proof is “in the pudding” in terms of what he’s been able to accomplish so far, says Cooper. Once the privatization goes through, however, the window into New Look’s financials will largely go dark. We’ll never know how successful the CEO’s moves have been (at least until the next big corporate play years from now). Amiel says that could just as likely be an initial public offering as a takeover by another private equity firm. “By then, we will be seriously committed to international expansion beyond North America,” he says.
The CEO might be nearsighted with a -6 correction. But his vision for New Look’s future has rarely been clearer.
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Nicolas Van Praet