Coastal Contacts Inc.
TSX : COA

Coastal Contacts Inc.

February 15, 2008 14:53 ET

Eyeglasses Business Launched After Successful Pilot Program

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 15, 2008) -

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Coastal Contacts Inc. (TSX:COA) announced today that it has launched a new eyeglasses business unit in North America and Europe, following the results of a successful pilot program during the past 60 day period.

The pilot program consisted of a marketing promotion to a representative subset of existing Coastal contact lens customers in North America and Europe, to gauge the acceptance of a direct-to-consumer eyeglasses offering. The test utilized both in-house and third party eyeglass manufacturing resources. During the test period more than 1000 pairs of eyeglasses were ordered and delivered to customers in a timely fashion. Customer data and feedback was then analyzed to enhance the offering and service model.

"The results of our pilot program were encouraging," stated Roger Hardy, Coastal's President and CEO. "Customers were very receptive to the opportunity of buying high quality eyeglasses at an affordable price, with seamless delivery and service. We learned a great deal during the test and have implemented that intelligence in the eyeglasses offering that we will be rolling out to our existing 1.5 million active customers and potential new customers around the world".

Hardy continued "One of our key initiatives is to add vision care products to our offering which further provide our customers with convenience and savings. Eyeglasses can be a costly item for most consumers, as traditional channels must build in significant costs, such as expensive retail space. In conducting our research we were surprised to learn that we could typically offer consumers savings of 50% or more on eyeglasses while generating strong gross margins. We have demonstrated the ability to disintermediate the contact lens industry successfully and now plan to apply our experience to eyeglasses as there are many parallels between the two product categories."

Market research estimates that the global market for contact lenses is US$4.8 billion annually. Coastal estimates that approximately 10% of the global market currently purchase their contact lenses on a direct-to-consumer basis. The addressable eyeglass industry is estimated at over $34 billion annually and the proportion currently sold through the direct-to-consumer channel is estimated to be less than 1%.

About Coastal Contacts:

Coastal Contacts is one of the world's fastest-growing vision care suppliers. Leveraging its world class operations in North America, Europe and Asia, Coastal is building a predictable recurring revenue stream in the contact lens segment and is developing complementary branded vision care products. Already No. 1 in many of its markets, Coastal is rapidly advancing toward its goal of becoming the "World's Online Optical Store".

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Coastal Contacts Inc. with respect to its performance, business and future events. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, those relating to changes in the market, potential downturns in economic conditions, limited suppliers, inventory risk, disruption in our distribution facilities, foreign exchange fluctuations, regulatory requirements, demand for contact lenses, changes in business strategy, competition and dependence on the internet. These risks, as well as others, could cause actual results and events to vary significantly. Coastal Contacts does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements.

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