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COLE NATIONAL CORP.

 

COLE NATIONAL CORP., founded by Joseph Cole in 1944, has grown into a massive specialty retailer with its leading interests in retail optical and personalized gift chains. Currently located in Twinsburg, Cole Natl moved in 1977 from its headquarters on Grant Ave. in CUYAHOGA HTS. to LYNDHURST. Ten years later, the company relocated again to 5915 Landerbrook Dr. in MAYFIELD HTS., before finally settling at its present location at 1925 Enterprise Pkwy in Twinsburg.

In 1926, Joseph Cole entered the retail key business when he joined the Nat'l Key Co. in Cleveland. Seven years later, Cole left the company to establish a key division at Curtis Industries, which started as a single key shop in the parking lot of the Sears Roebuck store on Carnegie Ave. In short time, however, Cole turned the key division into the second largest key company in the nation, behind Natl Key, and, in 1950, Cole purchased both the Natl Key Co. and Curtis' key-making accounts. The new company was the largest of its kind in the country and Cole soon earned himself the title of the "key king." Manufacturing neither keys nor key-making equipment, Cole's Natl Key relied on over 100 suppliers to provide its growing network of outlets with a product line of over 3,000 different types of keys and accessories. The company went public in 1958, selling out its stock subscription in a single day. In 1960, the company changed its name to Cole Natl as it expanded into different product areas.

The acquisition of Masco Optical in 1960 served as the foundation for Cole Natl's retail optical division that included the operation of the optical departments located in Sears (first opened in 1961) and Montgomery Ward department stores. Within five years of its first acquisition, sales at Cole Natl's over 100 optical outlets reached nearly $10 million. That same year, the key division began offering colored aluminum automobile keys and the company experimented with other soon-to-be successful innovations in retailing. In 1966, Cole Natl opened its first "Can-Do Shop" kiosk, which packaged a wide variety of services like engraving, rubber-stamp making, plastic sheet laminating, and photocopying with its key-making services at a shopping mall in Louisville, Kentucky. With time, the concept evolved into the Things Remembered gifts store chain, which would become the leading retailer of personalized gift items offering engraving services on pewter mugs, glassware, jewelry, and other items for special occasions. By 1975, sales at Thing's Remembered gift stores surpassed $10 million.

Despite the fantastic growth of its keys shops and gift stores, the main thrust of Cole Natl's business would be as a retail eyewear provider. By 1983, the optical division opened its 500th location and total sales for the division exceeded $100 million. Within six years, sales grew to just over $200 million. At the time, Jeffrey Cole, son of the founder and then chairman and chief executive, hoped to position the company to capitalize on an aging baby-boomer population (estimated at nearly 78 million) and their future need for corrective lenses. In 1995, the optical division expanded into BJ's Wholesale club, opened its first location in the Target retail chain, and contributed over $300 million to Cole Natl's total sales of $500 million. The following year, Cole Natl made its largest acquisition when it purchased the optical retailer Pearle Vision for $165 million. In addition to bringing 692 new locations to Cole Natl's existing 1,500 retail optical stores, the purchase brought a 21% share of Pearle's European division; Pearle Europe. The acquisition gave Cole Natl 7% of the total market share of the retail optical business and made it the second largest such retailer, behind its chief rival Lenscrafters. In 1997, the company purchased Flint, Michigan-based American Vision Centers, which also operated the franchises NuVision Optical and EyesFirst Vision Center. With the acquisition, the firm became the largest optical retailer in the country and Cole Natl's total sales reached $1 billion, with its optical divisions delivering nearly 80% of that revenue. The following year, Cole Natl emerged on the top of the Plain Dealer's list of the best performing companies in Ohio. In addition to Cole Natl's retail optical outlets, the company's managed vision division also secured their position within the eye care industry. Started in 1988, Cole Managed Vision was designed to provide managed vision care benefit programs (offering eye exams and discounted eyewear) to corporations, unions, and other large group or member-based organizations By 1995, CMV had nearly 23 million individuals enrolled and by the time the company began offering laser vision corrected surgery through its managed vision program in 1999, nearly 50 million were enrolled. As of 2003, the plan expanded to include nearly 90 million individuals. As a further indicator of its success, Cole Natl donated $10 million in 1999 to the to establish the Cole Eye Institute, which opened its 130,000 square foot facility at Euclid Ave and E. 105 St. to offer clinical care, research, and education into the nature of eye diseases.

Cole Natl's rapid expansion strategy, however, was not without some problems. By the end of the first quarter in 1999, the company witnessed its net income drop off by nearly 50% and by the end of that year, the company announced that it could be closing the optical department in Montgomery Ward department stores in order to focus more attention to its more profitable Pearle Vision and Sears Optical stores. Recently, in the wake of the nationwide Enron accounting scandal in 2002, Cole Natl fired the Arthur Anderson accounting firm and announced that it would be restating the previous five years' earnings in order to more accurately track revenues for the sale of eyeglass warranties. The restatement shaved nearly $40 million from its earnings between the 1998 and the 2001 fiscal years. In June 2003, Larry Pollock stepped in to replace a retiring Jeffrey Cole as chief executive. Later that year, Cole Natl reported a $12 million loss during the first half of 2003 and company executives were considering an unsolicited bid to buyout the firm.

By 2003, Cole Natl Corp., located in Twinsburg, employed almost 17,000 (including part time and seasonal help) worldwide and its Pearl Vision , Sears Optical, Target Optical, BJ's Optical, Cole Managed Visions, Pearl Europe, and Things Remembered operations rang up nearly $1.1 billion in sales.