OPTICAL chain Black & Lizars has highlighted the pressures facing firms on Scotland’s shopping streets after seeing losses widen.
The Glasgow-based firm lost £179,000 before tax in the year to September 30, against £49,000 in the preceding year as the costs of a retrenchment programme weighed on the bottom line.
Black & Lizars decided to narrow its focus to concentrate on the markets in the Glasgow and Edinburgh areas in the belief that would give it the best chance of success amid intense competition.
It sold nine outlets in places ranging from Aberdeen to Troon to rival Duncan & Todd in April.
Read more: Deal makes optical group Scotland's biggest independent
The accounts reveal Black & Lizars got £3.5m for the stores paving the way for it to pay £2 million dividends and repay its bank debt. Financier John Hare has owned the firm since 2009.
Writing in the accounts, director Allan Beckett said the business had undergone significant change in 2018 as it re-focused its attention on Glasgow and Edinburgh.
He noted: “The principal risks facing the business come from increasing price and promotional competition from existing and new entrants into the optical sector, particularly within the retail environment.”
Mr Beckett noted that in addition to selling the stores bought by Duncan & Todd Black & Lizars closed two outlets in the latest year, without identifying them.
The retrenchment process continued in May when the firm closed an outlet in Falkirk.
Read more: Optical Express grows sales amid tough times on high street
The business said then it would work closely with Vision Express to ensure patients continued to have access to local services. It noted Vision Express had a branch in Falkirk metres from its own.
The company incurred £85,000 exceptional costs in respect of an unspecified number of redundancies in the year to September and £150,000 onerous lease provisions following the closure of its Belfast practice.
Black & Lizars has 13 outlets including the Clements Hearing Services operation in Glasgow it acquired in 2017.
“We are confident that the focus we can now bring to a smaller volume of practices in concentrated geographical areas will improve the business in the long term,” said Mr Beckett in the accounts, adding: “The outlook for the company remains positive.”
His comments regarding the risks faced by the firm underline the challenges posed by discounters and online players.
Read more: Scottish retailers stung by record insolvencies
The deal with Duncan & Todd also reflected the role that private equity-backed firms are playing in sectors in which investors see consolidation opportunities. Duncan & Todd secured £15m investment from LDC, the private equity arm of Lloyds Banking Group, which took a majority stake in the firm.
The firm has around 40 branches across Scotland. Some operate as 2020 Opticians.
A Black & Lizars spokesman said: “Given the continuing retail stress on the High Street, we are pleased that our recent restructure allows us to concentrate on our clinical strength in Glasgow and Edinburgh. We continue to invest for the future with five additional Optometrists joining us this month.”
Black & Lizars paid £200,000 dividends in the year to September.
The average monthly number of employees fell to 231 during the year, from 240 in the preceding period.
The company made £120,000 operating profit before exceptionals, down from £146,000.
It launched a contact lens recycling service last month.
The business can trace its roots to 1830 when John Lizars opened a practice in Glasgow’s Merchant City
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