That was the goal set by the world's largest optical retail chain one year ago, and it managed to reach it in spite of the difficult economic situation in the USA. Cole National's net income grew to $5,195,000 in the 52 weeks ended last Feb. 2, as compared to $2,229,000 in the 53-week period of the previous fiscal year. The gross margin rose slightly to 66.9 percent from 66.8 percent, and operating expenses remained flat, but the increased cash flow permitted a sizeable $27 million reduction in net debt.
The addition of 107 new Target Optical stores and sales increases in each division of Cole National's vision segment allowed the group to market a slight overall sales increase to $1,101.3 million in the past year from 1,077.1 million, despite the missing extra week of trading. On a same-store basis, Pearle Vision's company-owned stores and Cole National Brands both raised their sales by 3.8 percent for the year, with Cole National performing even better in the 4th quarter thanks to more fashionable merchandise and the introduction of two Sears private labels.
Cole National is now soft-pedalling the development of Target Optical, planning to open only 30 SuperTarget locations and focusing on improving operations and customer service. The group is also planning to accelerate the growth of its Pearle Vision franchise in the USA. Including Pearle Vision franchises, Cole National ended the past year with a total of 2,143 optical units in the USA, Canada, Puerto Rico and the Virgin Islands. Cole also has a 21 percent stake in Pearle Europe, which raised the number of outlets to 943 in 7 countries ? Austria, Belgium, Germany, Holland, Italy, Poland and Portugal - through internal growth and acquisitions.