As brick and mortars stores struggle, 1-800 Contacts surges
KKR & Co. Inc is in advanced talks to buy 1-800 Contacts, the largest retailer of contact lenses in the U.S., from investment firm AEA Investors LP, in a deal worth more than $3 billion.
According to Bloomberg News, sources familiar with the acquisition reported KKR beat out rival private equity firms in an auction for the contact lens retailer.1 The decision is not yet public, and talks could still fall through.
1-800 Contacts started in a dorm room in 1995, according to the company. The company was traded on Nasdaq for about a decade before being bought by private-equity firm Fenway Partners in 2007. When the COVID-19 pandemic began, it saw enormous growth and a surge of sales as consumers left brick-and-mortar stores for online alternatives.
The optometric community and the U.S. Food and Drug Administration (FDA) have been at odds with online glasses and contact lens retailers, including 1-800 Contacts, for years because of public health concerns with counterfeit products being sold.
ODs weigh in
Optometry Times® asked optometrists about the acquisition and found that public health topped their list of concerns. Editorial Advisory Board member David I. Geffen, OD, FAAO, warns ODs of the dangers facing eye care and suggests stressing the value of comprehensive eye exams to patients thinking of ordering online.
“The advent of private equity money coming into eye care is going to make the product side of the business more competitive than ever,” Geffen says. “Independent doctors need to provide value for service and make sure their patients realize what they are getting from them instead of just ordering from a bot!”
Editorial Advisory Board member Mile Brujic, OD, FAAO, stresses the importance of patient healthcare needs and not business profitability.
“Healthcare providers make business decisions in their offices based on improving patient care; businesses look for opportunities in health care and at times prioritize profitability ahead of patient care,” Brujic says. “We hope that the acquisition is a responsible one that places patient’s healthcare needs first."
1. Ahmed N, Porter K, Tse C. KKR nears $3 billion-plus deal to buy 1-800 Contacts. Bloomberg. Available at: https://www.bloomberg.com/news/articles/2020-09-22/kkr-said-to-near-3-billion-plus-deal-to-buy-1-800-contacts. Accessed 9/23/20.