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Essilor to buy Coastal Contacts for $445 in record Canadian ecommerce deal

Clearly Contacts store is pictured in this handout photo courtesy of Coastal Contacts Inc.

Canadian shoppers have been comparatively slow to jump onboard the e-commerce trend, stymied largely by the sheer size of our nation and the associated challenges of delivering consumer goods in a timely manner.

But news of the sale of Coastal Contacts Inc., the parent of clearlycontacts.ca, offers strong evidence that our purchasing patterns are shifting dramatically.

The deal, announced late Wednesday, with French optical-lens-manufacturing giant Essilor is worth an estimated $445 million. It represents the largest investment in a Canadian e-commerce company to date, and the largest ever in a Canadian optical company.

Hubert Sagnières, Essilor’s chairman and chief executive officer, left little doubt of his belief in the strength of the internet to reach consumers, noting, in a media release, its powerful impact on the health industry in recent years.

The “purchasing process is becoming more diversified,” said Sagnières. “The Internet, if used properly, can help to drive market growth by educating consumers and making it more convenient for them to enjoy good visual health.”

E-commerce is approaching 10 per cent of overall retail sales in the U.S., while in Canada, that figure is closer to five per cent. Experts, however, predict the gap between the two countries will narrow over the next two to three years as retailers make it ever easier -- through price-matching guarantees and complementary shipping -- for Canadian shoppers to buy online.

Certainly we appear more than willing to catch up to our American neighbours. Online sales at Walmart were strong during last year’s Black Friday and Cyber Monday events, with nearly one of out every two Canadians choosing to do their purchasing online rather than head to a store. That’s a dramatic change over the previous year where the retailer’s online shoppers in Canada numbered only one in every 10.

Canada Post has also reported a significant increase in its usual parcel volume, led largely by the rise of e-commerce. The postal service announced in December it will be putting a stronger focus on parcel delivery while phasing out door-to-door letter service.

Amazon continues to lead the way online. The retail giant is known for its quick and efficient delivery service of one or two days, and is looking to move to same-day service next year.

Roger Hardy, Coastal.com’s founder and CEO, said the deal with Essilor increases Coastal.com’s ability to achieve its business goals while realizing a significant all-cash premium for its shareholders.

The board of directors of Coastal.com unanimously approved the acquisition, which remains subject to customary closing conditions, including the approval of Coastal.com’s shareholders and regulatory approvals. The transaction is expected to close within the next 90 days.