American Greetings widens focus with Magnivision - acquisition of eyewear company

Discount Store News, April 19, 1993

CLEVELAND -- American Greetings, based here, has signed an agreement in principle to acquire Magnivision, a leading manufacturer and distributor of non-perscription reading glasses.

This is in keeping with American Greetings' decision a number of years ago to acquire consumer product companies which fit into its mass channels of trade.

Reading glasses is a brand new category for American Greetings, one that is growing almost as rapidly as each baby boomers' eyesight is diminishing.

According to various estimates, the non-prescription reading glass market accounts for about $200 million in retail sales. In making the announcement, American Greetings reported that the category is growing at a rate of 4% to 5% a year, but that it could see double digit sales increases in the coming years.

Despite the growth of prescription optical centers inside and outside of discount stores and drug chains, the non-prescription category continues to expand, and is becoming more fashion sensitive. American Greetings characterized the category and Magnivision's product line as a "low cost, convenient alternative" for a common baby boomer problem: not being able to focus on small print.

The Magnivision line of products includes a variety of lenses and both metal and plastic frames. In addition, the company makes various accessories, including Comfees brand of lens cleaner.

American Greetings expects to call its creative expertise as well as its merchandising pull into play in this new arena. "In addition to enhancing Magnivision's products with our fashion, color and creative expertise, we expect to improve the subsidiary's position in the market with our strengths in merchandising, marketing, distribution and customer services," said Morry Weiss, ceo, American Greetings.

Through its Wilhold division, American Greetings already has a foothold in the fashion accessory market. In addition to its greeting card franchise, the company also operates Acme Frames. All of its divisions are sold at mass market outlets and drug chains.

In a stock swap transaction agreement, Magnivision would become a wholly-owned subsidiary of American Greetings and part of its Consumer Products Division. The subsidiary will continue to operate from its 75,000-sq.-ft. facility in Pembroke Pines, just north of Miami. Key personnel at Magnivision are expected to remain in their management roles, including Morton Nyman, president; Michael Nyman, vp, sales; and Steve Felkowitz, vp, finance and cfo.

American Greetings has stated that its goal is to "grow each of its consumer products businesses to a minimum of $75 million in annual revenue, while achieving a solid return on investment."

"We have a solid 16-year track record of success, and the synergy with American Greetings should be a boost to Magnivision's sales and performance," said Nyman, who founded Magnivision in 1977.

According to American Greetings, the acquisition will have a broader base of companies contributing to revenue and profits and it will give it a broader base in which to become a valuable mass market resource.