FOUNDER OF OPTICIANS GIANT, SPECSAVERS
Ammanford is not normally thought of as a centre for entrepreneurial excellence: quite the opposite, in fact. But with the founder of Specsavers, the UK's largest spectacles retailer, coming from our good town, Ammanford can at last overturn that misconception
Ammanford's Doug Perkins and his wife Mary, founders of international opticians giant, Specsavers.
Policeman's son Doug Perkins was born in Llanelli but lived on Wernddu Road in Ammanford for many years. As a student in the 1960s he worked for a time in Ammanford bowling alley—the smallest alley in Wales with only two lanes—and spent his early years as an optometrist working in nearby Llanelli and Carmarthen. When the bowling alley venture folded after just a couple of years, it re-opened as a cabaret club and Doug Perkins was the club's doorman for a while. He also played second row for Ammanford Rugby Football Club and joined his family as a member of Ammanford Gospel Hall, a local fundamentalist church, and home since 1911 of the Ammanford Assembly of the Plymouth Brethren. The Perkins family are a well-known Plymouth Brethren family from the Maesybont area, near Cross Hands. Doug Perkins becomes the second millionaire member of Ammanford's Plymouth Brethren after their founder, William Herbert (1859-1937). Herbert started preaching on the streets of Ammanford in 1888 but had to wait until 1902 before he had enough followers to found an Assembly, the name given by the Brethren to their churches. It was William Herbert, too, who provided financial assistance for the building of their Gospel Hall on Lloyd Street in 1911, cunningly designed with a sloping floor to discourage it being other than for preaching the Gospel (no dancing!). See William Herbert in this website and also Ammanford Gospel Hall for a history of the church.
Specsavers co-founder, Mary Perkins, made a Dame in 2007.
Like her husband, whom she met while they were both studying to become opticians at Cardiff University, Mary Perkins, born in Bristol on February 14th 1944, boasts a humble upbringing, having been brought up on a Bristol council estate. Some describe her as the soul of the business. She holds the title ‘founder'—her husband Doug is chairman—but she sits on the board, oversees much of the company's development, runs Public Relations and supplies the retail know-how and vision. Doug describes his own role as ‘putting the infrastructure round that, and making sure we have done the support and marketing and motivation of people.'
It is Mary, for instance, who still travels the country working as the firm's ‘mystery shopper', checking that Specsavers staff are fully attentive to customers.
‘I play an undecided browser', she says. ‘I just wait to see who comes up to me. I have to wear a wig, of course, because most of the opticians would recognise me. In fact, I've got rather a good set of wigs.'
In June 2007 her success, wig-assisted or otherwise, received the royal seal of approval when she was made a Dame Commander of the Order of the British Empire in the Queen's birthday honours list.
Specsavers founder Doug Perkins made a special visit to South Wales on the 4th March 2005 for the opening of a new Specsavers practice in his former hometown of Ammanford.
The Ammanford branch is the 27th Specsavers practice in South Wales, which Doug Perkins and wife Mary opened on Quay Street at the store's official launch on 4th March 2005.
Opening the Ammanford practice, Doug Perkins said: ‘Ammanford has a special significance to me as I spent much of my youth growing up here and in the surrounding area. I try to get back as often as possible, so I'm delighted to be returning home for this official launch.'
‘Carmarthenshire is very special to me personally. I think up to the age of about 20 I had barely been outside of west Wales,' said the policeman's son. After graduating from Cardiff University he spent his early years in the optician's business in Carmarthen and in his spare time played rugby for Ammanford, Carmarthen and Llanelli. While in Ammanford for the opening of the store, the couple also visited the house where Doug Perkins grew up.
‘I know the shops in Ammanford, I know the chapels and I know the doctor's surgeries', he said. ‘It has not changed a lot and why should it? It's great to be back.'
The Perkins, husband and wife, however, live in the tax haven of Guernsey where the Specsavers headquarters is located.
Doug Perkins and his wife opened their first opticians practice in Bristol in the 1960s, building up a small chain in the west country before selling the business in 1980 for £2 million, and moving their family to Guernsey in Britain's Channel Islands in 1980, where Mary Perkins' optician father had retired. By 1984 they were bored, and plunged back into the market with Specsavers, operating from a spare bedroom of their house in Guernsey with a table-tennis table as a desk. The couple opened the first Specsavers practices in Guernsey and Bristol in 1984, followed shortly by practices in Plymouth, Swansea and Bath, and despite current sales in the region of £1 billion a year, Specsavers remains a private, family-run business.
‘Between us we had a lot of expertise in optics; we had the contacts and knew good manufacturers', he added. The couple started off using a spare bedroom in their house as a stock room.
‘We wanted to keep the overheads low in those days, and still do, so we used our home as the headquarters. In 1984 the first Specsavers store was in Swansea because that was my home area and shortly after that Mary opened in Bristol which was her area.'
The couple said when setting out they had not thought about how big their businesses would become.
The Specsavers group, of which Mr Perkins is chairman, has a fifty percent stake in each of the outlets, with the local opticians owning the other half. It estimates that it sells a pair of glasses every six seconds
The Perkins describe the arrangement as a joint venture rather than a franchise.
‘It is because of the joint venture partnership that we have been so successful', said Mrs Perkins. ‘We did not want to run a chain of opticians so we came up with this.' Her husband added: ‘It's obviously a formula that works.'
Specsavers is the biggest of the four major UK Opticians (retailers) that control 70% of the British market for spectacles and 30% of the market for contact lenses. They have also recently added hearing aids to their product range and their Hearcare division provides hearing tests and hearing aids within the Specsavers optical stores.
The company took off during the 1980s when Margaret Thatcher's free-market Tory government deregulated the UK opticians' market, allowing them to use previously forbidden advertising and marketing techniques to rapidly take over a market that had belonged to independent local opticians.
‘People now don't remember what it was like', Mary Perkins remembers of the period before deregulation. ‘Optometrists didn't have showrooms. Before Specsavers, you weren't even allowed to put a sticker in the window saying you accepted credit cards. We did take an awful lot of stick and the rest of the profession was very much against what we were doing.'
The Perkins have stated belligerently, regarding the remaining local opticians, that ‘their days are numbered', and in fact their major competition now comes from large chains such as Boots the Chemist, Dollond and Aitchison, and Vision Express.
As of 2008 the company has over 1,000 stores in the United Kingdom, Spain, Republic of Ireland, Norway, Sweden, Finland, Australia, Denmark and the Netherlands and sales are already in the region of £1 billion a year. Recently Specsavers acquired over 40 existing practices in Australia, all of which will eventually be re-branded as Specsavers Opticians.
Much of the company's success is attributed to their heavy spending on advertising, both on national televison and in the local media where their branches are located. In 2002, for example, local print media took up 16 percent of total advertising spending that year, with local radio accounting for another 7 percent. In 2006 they spent £27 million on advertising. Specsavers long-running and successful advertising campaign is famously based on the catch-phrase 'Should've gone to Specsavers' which appears on the company's TV advertising.
Specsavers sponsor rugby referees
In 2002, as part of a sponsorship deal, Specsavers offered free eye tests to select members of the Welsh Rugby Union who Perkins thought could use some extra help: Welsh Rugby Union referees!
At the time, referees were subjected to so much verbal abuse that applications to become referees were down 50 percent. Specsavers paid £1 million to display the firm's name on Welsh referees' shirts for four seasons, and in 2006 Specsavers signed a similar deal to sponsor Scottish rugby referees.
Free-market economics, which became a near-religious belief for the Thatcher-led revoution of the 1980s, can mean quite the opposite in practice, however, and the word ‘free' in the slogan can slyly turn into ‘unfree'. Once any organisation grows large and powerful enough it has a tendency to want to take over, or drive out, any competition found in its way. By such means monopolies, or near-monopolies, can be created, the polar opposite of the so-called ‘free market'. And that's exactly what Specsavers attempted in the new millennium when it tried to close down a competition who had the temerity to sell glasses cheaper than themselves.
Specsavers, along with several other high street opticians, made an unsuccessful attempt to use legal action and an unsuccessful complaint to the General Optical Council (GOC) to close down Glasses Direct, a UK Internet retailer whose prices, at that time, undercut those of Specsavers considerably.
The feud between the companies continued in 2006 when James Murray Wells, the Managing Director of Glasses Direct, sought election to the General Optical Council, arguing that Internet retailers and their customers needed representation. In response the Managing Director of Specsavers, Doug Perkins, wrote to Specsavers branches asking the company's opticians to unite to vote for anti-Murray-Wells candidates to protect their own interests: ‘... candidates with the interests of hands-on, professional practitioners at heart'. The leaking of Perkin's memo was followed by a statement from the General Optical Council claiming that its priority was maintaining high standards of eye care for the public, and not members' commercial interests. Specsavers refused to confirm or to deny that they were trying to drive Glasses Direct out of business, and Murray Wells withdrew from the election.
Specsavers sparks fury over web U-turn
The fifty-fifty partnership between Specsavers and their stores became the next casualty in the hitherto picture-perfect progress of the company. The Perkins have built their business on a franchise basis, with store owners concentrating on customer services, while benefiting from Specsavers' marketing expertise and international supply chain.
In return for a substantial payment to Specsavers, franchisees are promised that Specsavers will not open another store nearby.
However, Specsavers' plans for an online offer caused fury among franchisees.
The aim is to offer prescription spectacles for sale online from a starting price of £29.99, a far cry from the hundreds of pounds that Specsavers' customers can expect to pay for top designer brands in-store.
Under the plans, customers will choose from a range of frames online while being invited to a Specsavers store to have their prescription checked. They will then return to the store to pick up their glasses where they will be fitted. If a customer has had their prescription taken with another optician they can also purchase the actual lenses and frames online with Specsavers.
The intention is to offer a limited range of relatively cheap glasses online—more expensive designer brands will not be available.
But some franchisees are not convinced. They are furious with the Perkins, fearing their businesses will be undermined. Why, they ask, should customers come in to a store to pay the full price when they can get glasses cheaper just a click away? Store owners have only the promise of tiny margins on online sales as recompense.
A source said: 'Franchisees are angry indeed. Specsavers is trying to placate them by saying that the increased footfall in store will lead to more sales as customers buy extra glasses.
'But franchisees do not think people who shop online for spectacles are likely to buy more glasses in-store. They already pay a high price for the rights to use the Specsavers name, now they face losing out further.'
The move is especially surprising since Specsavers chairman Doug Perkins has led the charge against the online sale of glasses pioneered by Jamie Murray Wells, who launched Glasses Direct three years ago. Perkins, who is on the Companies' Committee of the quango that regulates opticians, the General Optical Council, even tried to block Murray Wells' election to the GOC.
He sent a letter to Specsavers staff asking them to rally around a candidate from one of the Specsavers branches. He wrote:
'If the votes end up being spread across several candidates with the interests of hands-on, professional practitioners at heart, the vagaries of the ballot may result in the election of councillors who set out to act directly against everything that we hold dear.'
In the letter he specifically mentioned that Murray Wells was standing for election. Murray Wells subsequently withdrew.
The Companies' Committee has said that it believes the sale of glasses online could pose a risk to 'public safety' while the GOC subsequently said 'the supervisors must be able to exercise their professional skill and judgment as a clinician' when selling prescription glasses.
For Murray Wells, who sells his glasses online at a starting price of £15, Perkins is guilty of breathtaking hypocrisy.
'They have decided to follow us after saying for the last three years how unprofessional it is to sell glasses online,' he said. 'This is the first big High Street optician to take its head out of the sand and recognise the power of the Internet. But the hypocrisy is just staggering.'
Murray Wells welcomes the extra publicity that Specsavers' move will bring to online sales, but also criticises the business model that Specsavers is proposing. 'They seem to plan to use the web as a lead-generation tool rather than a sales mechanism,' he said. 'They encourage the customer into the store for an eye test and make them come back to the store to pick up the glasses, while we are purely an internet business so our costs are less. But then, they have all those flashy High Street stores to support.'
Specsavers operates most of their stores under a system which is called the 'Joint or Shared Venture Partnership'. This is similar to a franchise agreement between Specsavers and the franchisee; however, unlike many franchises, Specsavers' stores work under the policy that 'any Specsavers customer is our customer', thereby meaning that a customer from one branch of Specsavers can expect to get equal service from another branch elsewhere. It also differs in that Specsavers own shares in the franchisee business rather than just providing goods and services under a franchise agreement. In newer territories such as Sweden, Norway and Spain, they operate a normal franchise agreement.
Unmasked: the profit secrets of opticians
The price of a pair of glasses is enough to make you squint. Two thirds of the population wear spectacles, but while the cost of many consumer goods is stable or falling, the price of ‘face furniture' has soared by 40 percent since 1999. The average cost of a pair of specs is now around £200, but it's easy to spend at least twice that with specialist lenses or designer frames. The industry isn't keen for you to know what the actual costs are, and for good reason. Even accounting for the subsidised eye test, the consumer is getting a pretty raw deal.
There is nothing in the actual manufacturing cost of spectacles to justify the prices charged. ‘Basically it is a bit of wire and glass made in 15 minutes or less on a machine, and which costs £3-£4, or up to £7 for the more complex ones. It is a complete rip-off, frankly', said James Murray Wells, founder of Glasses Direct, which offers low-priced spectacles over the Internet.
The reason why prices are high is clear. Around 70% of this £2.4bn industry is controlled by just three firms: Vision Express, Specsavers and Boots (after Boots merged with opticans Dollond & Aitchison, the combined company became Britain's second-biggest optician's chain after Specsavers). Independent opticians have been shrinking under the promotional onslaught of the high street giants.
Profits in the frame
The money isn't being made by the labs, the firms that actually manufacture the glasses, but the big international optical groups who own most of the retailers, have the purchasing power, and have a lock on the lucrative market for frames.
Relationship with Guernsey
Specsavers' headquarters are based in Guernsey where the founding partners were resident when the company was formed in 1984.
Specsavers is the largest employer on the island of Guernsey, providing 500 jobs. Guernsey is a crown dependency of the UK, but not part of the UK, and has substantially different company reporting standards to the mainland, greatly reducing information available on Specsavers operations and profitability. Guernsey is also considered a tax haven, where both corporate tax and income tax are significantly lower than the UK. The Perkins's don't reveal how much Specsavers is worth, or how much they draw from the business, but some business analysts have estimated the family's share, conservatively, at £500 million. In reply to a journalist's question about this in 2005, Mary Perkins said: 'Actually we don't take a salary. We live off the interest on our original investments.' According to the Sunday Times Rich List the couple were worth £1,15 billion in 2011 which was up 42 percent from the previous year.
The couple plan gradually to hand over control to their three children. Both founders are now in the process of handing over the reins to their son John Perkins, born in 1972, who is currently the managing director; one daughter runs their operation in the Netherlands; and another works as senior accountant at the firm. Two trained as accountants; the other read business studies. That's organisation for you.
Internet Sources for this article:
Some of the information for the above has been gathered from the following internet sources. Click on a link to see the website.
Times Online (Andrew Davidson interview)
Date this page last updated: May 8, 2011