Dame Mary Perkins, founder of Specsavers, revolutionised the High Street optical market by building a £1bn brand. With her eyes fixed firmly on future growth, she talks here about innovation, why the customer is king and supermarket competition
My staff are falling around laughing right now," says Dame Mary Perkins, the 65-year-old founder of Specsavers who is regaling me over the telephone with the story of how she had lost a pair of glasses for the first time. "You'll never believe it, I've been wearing them for years, since school, and I've just lost my first pair ever."
The loss, albeit a minor one, is uncharacteristic of the woman whose finely honed organisational skills (she is a mother of three) and propensity to avoid risk have helped her and optometrist husband Doug Perkins build the largest privately owned opticians in the world. The company, which celebrated its 25th anniversary last month, now has a total of 1,318 stores across the UK, Ireland, the Netherlands, Sweden, Norway, Finland, Denmark, Spain, Australia and New Zealand. Last year Specsavers turned over £1.2bn, sold around 20 million frames and has captured 39 per cent of the UK glasses market and 40 per cent of the contact lenses market.
But Dame Mary didn't always want to be an optometrist. "I would have loved to have been a librarian—I adore books," she says. "Either that or a maternity nurse, one of those people who go out and look after rich people's babies for a month to get them into a routine." As it was, Dame Mary developed an interest in optometry after spending Saturdays and school holidays helping her optician father. "If my father hadn't been [an optometrist], possibly I'd have never have thought of it, because it was a fairly male-dominated profession years ago, and I wouldn't be me and I wouldn't be where I am."
Dame Mary gained her optometry degree in 1965 at Cardiff University, where she met Doug. In 1967, they founded Bebbington and Perkins, a group of 23 wholly owned opticians around Bristol. They sold these for £2m in 1980 when they decided to move to Guernsey—not for tax purposes, according to Dame Mary, but to be near her parents, who had retired. For three years she "dabbled at things", and then in 1984 Margaret Thatcher's government loosened regulation of the professions, including opticians.
"It was a great temptation to come back into optics," she recalls. Where before opticians had been banned from advertising products and services, now they were allowed to do so. "We were the first to advertise, have showrooms and let people know what our prices were. Buying glasses then was quite expensive so people were not visiting opticians. There is a health aspect as well, so we wanted to get people to visit opticians on a regular basis and provide more choice at affordable prices for everyone."
With her husband, Dame Mary visited the US to look at how franchise optical outlets were run there, but she was not keen on the model. "The franchisor was charging the franchisee a fee, but not doing much for them. We wanted to stay hands on and make sure this was going to be successful."
Instead, with money from the sale of their previous business, the couple set up the company as a joint venture partnership where each Specsavers opticians is legally a separate business, with 50 per cent of the shares owned by the Specsavers Optical Group and the other half held by the practice partners (one of whom has to be an optometrist, but who can also be the dispensing optician, technician or senior manager). Each practice pays a fee to the group for services and support such as IT, marketing, operations and retail training—"so all he has to do is what he's been trained for, which is to be an optician". After paying for services out of turnover, any profits belong to the partners in that store and their staff.
"It's very much a working partnership, quite different to a franchise," says Dame Mary, "which is one of the reasons why nobody's ever failed at being a joint venture partner—we've never had to close a store."
Specsavers has used the same model to gain a major foothold in the hearing aid market. In only three years it has become the biggest provider of hearing aids outside the NHS, with 142 centres throughout the UK and Europe. "The type of people needing hearing assistance are very much those who have to wear glasses as they get older, so the database matches up well," says Dame Mary. But she also reckons hearing loss is a future bombshell waiting to go off. "People are having hearing losses younger because of all these iPods and things we have sticking out of our ears, playing loud music."
In the early days it was a challenge to get opticians to sign up. "In the first year we started with five company stores so we could get the figures to show future joint venture partners that if they lower their prices, they'll see a lot more people and have a very good business." After a slow start the number of stores grew quickly. By 1991 there were around 150 practices in the UK. This was a turning point for Specsavers. "It was felt that if we needed to move on and become a household name, we needed different people at board level. We needed world-class people who were specialists in their field."
With a new board, Dame Mary had to find a new role. When she's not at board meetings or speaking to the press, she is customer champion. "I bore people at meetings and almost sit there with a label on my head saying 'think customer'. The thing that keeps us going is the end person who gives us their money, the customer." She visits Specsavers stores as the firm's mystery shopper—using wigs and disguises—to ensure customers are receiving a good service.
But how, when the company is growing so rapidly, does it maintain standards and company values? "Constant, constant, constant communication. And because staff who have been here from the beginning are still very much hands on—for example, my husband has been setting up Specsavers in Australia," she says.
Despite its size, Dame Mary says the company is definitely a family business, which will one day be handed over to their children. "I only wish I'd had more than three," she says. The couple's son, previously finance director, became joint managing director with Doug in 2007 while their elder daughter is head of internal audit and their younger daughter country manager for the Netherlands and Scandinavia. "The business is well set up now with succession planning at all levels. You think about succession planning for the owners, but you've got to have succession planning at board level, senior level, right the way through for a company to be going forward."
Dame Mary owes the success of the business to "sticking to what Specsavers stands for", differentiation and "staying one step ahead of the competition". She adds: "It's important to know your customer and know what the need out there is. For us, the joint venture partnership is like having thousands of eyes out there with the customer, feeding back rather than trying to run something behind a desk in an office. Any retailer will tell you that you don't run retail from behind a desk." Service and value are also important. "If you try to lead on price alone that's just a recipe for disaster."
The company's manufacturing plants—in the UK, Hungary, the Far East and Australia—have also given it competitive advantage. "We can move quicker on new products and things if we're doing it ourselves," she says. "It also enables us to control costs."
A rapid expansion programme-including 150 stores opened in Australia last year alone—has cemented Specsavers' dominant market position. "Staying ahead of the competition is relatively easy," says Dame Mary. "That's a horrible thing to say because it sounds as though we're complacent but it's not, it's just that at the moment, and this is how we intend to keep it [in the UK], we have three times market share of our nearest High Street competitors."
At the time of writing, Boots Opticians has announced it is to merge with Dollond & Aitchison, creating the UK's second-largest chain of opticians and knocking Vision Express down to third place in the UK's optical chain pecking order. If the deal, which is subject to the approval of competition authorities, is completed, Boots Opticians, as it will trade, will give Specsavers a run for its money. "Both Boots and D&A had a small market share, so it makes sense for them to merge for economies of scale and cost savings in these turbulent times. It will be interesting to see how 'competing' outlets in the new Boots/D&A company manage," says Dame Mary.
But she adds that her main competitors are supermarkets, in particular Tesco, which has 100 optometry outlets in its stores. "They only have a small market share, but people do a grocery shop each week so they are going past a Tesco opticians more than a Specsavers. And they have the ability to drop prices to ridiculous levels."
But there is some contention between Specsavers and smaller independent opticians unable to compete on price. "Specsavers is an interesting financial model. It is able to combine many elements of the independent practice with a worldwide supply chain," says Bob Hughes, chief executive of the Association of Optometrists. "If you are the only independent practice in a little town you've got a good business, but if Specsavers moves in it will affect you."
What about internet competition? "We've sold contact lenses over the internet for years," Dame Mary explains. But she says selling glasses online is harder because you have to be measured for them. "You can choose glasses on the internet, but what we can't do, because we're registered with the General Optical Council, is make those glasses and post them to the customer's home. You can do it on a single-vision, low-ish prescription, but people with multi-focal lenses have to be measured to make sure their eyes look through the right part of the lens. Nobody can sell those over the internet."
But James Murray Wells, founder of internet optical retailer Glasses Direct, says his company, also registered with the General Optical Council, asks customers with vari- and bi-focals glasses to send in their existing frames, which it then uses to measure the new pair. The firm also uses dispensing opticians to make home visits. "We are investing in technology which, in the future, will allow us to take measurements from a photo or a webcam," he says.
By cutting overheads Glasses Direct is able to offer spectacles at a fraction of the price of its High Street competitors. Over the next four years Murray Wells wants the company to become the world's largest direct seller of glasses. "In the 1980s Specsavers did a fantastic job of innovating and bringing something new into the optical market-they were the new kids on the block. But recently they have struggled to innovate because of the franchise model," he says.
But Hughes argues that buying multi-focals over the internet is "money down the drain". He adds: "It's a personal piece of fitting that has to be done by people who know what they are talking about. [The internet] has a niche, but I question how big that niche will be."
For now there's no doubt Specsavers is in a strong position and plans to stay there. But if the merger between Boots Opticians and Dollond & Aitchison gets the go-ahead, and if internet optical retail does take off, there will be interesting times ahead. But Dame Mary is ready. "If it [the optical industry] changes, we'll be ready to change with it," she says. "You never finish a job, the goalposts always move, but it's fun," she adds, chuckling. "Somebody asked me only the other day 'why do I go to work?' And I said 'well what would they have me do? Sit at home?' I love coming into work."