De Rigo has acquired General Optica, Spain's leading optical retail chain with 112 outlets in Spain and Portugal, for about $110 million. A few months ago General Optica was still eyeing a public offering on the Madrid stock exchange. The new owners plan to expand the chain, which is still present mainly in Madrid and in the North of Spain, up to 160 outlets in the next 3 years.

For the year ended last Nov. 30, General Optica reports an operating profit of $11.7 million on sales of $94.7 million. Sales rose by 5 percent as compared to 1997/98, when Optica reported a year-over-year 6 percent increase. The company's latest balance sheet closed without any substantial liabilities.

With this latest new acquisition, De Rigo consolidates a broad retail network totalling about 500 optical shops located mostly in the UK and Spain, where its own sales were not sufficiently developed at the wholesale level. The count includes the purchase in December of 1998 of the British Dollond & Aitchison chain, whose sales grew last year by 6 percent on a same-store basis.

De Rigo acquired General Optica through the purchase of General Optica International, the holding company for General Optica and Salmoiraghi & Vigano, for about $155.4 million. Salmoiraghi is Italy's largest chain of optical shops. Formerly called Vantios, Optica International controlled these two chains and Dollond & Aitchison until December of 1998.

In a second step, De Rigo agreed to sell Salmoiraghi back to a group of investors led by Arca Merchant and B&S Electra for more than $48.5 million. Among the investors are 7 managers of Salmoiraghi, including CEO Riccardo Perdomi and Giuseppe Ruscitto, the chain's chief financial officer. De Rigo preferred not to compete directly with other opticians on the Italian market. Italy represented about 28 percent of the group's global revenues before the acquisition of Dollond & Aitchison, and 10 percent after that major move.

De Rigo has yet to prove that its decision to invest in the retail sector will pay off in terms of earnings, which have not been disclosed yet for some time. For the year ended last Dec. 31, De Rigo reports revenues of $312.2 million, $222.8 million of which came through Dollond & Aitchison's 390 chain stores. Total sales rose by 206 percent in absolute terms, but they actually declined by 0.1 percent excluding the British chain and smaller acquisitions in Argentina and Greece.

Geographically, De Rigo's sales dropped by 9.4 percent in Italy to $30.4 million, due in part to slightly lower average prices. They increased by 5.9 percent in the rest of continental Europe, excluding the D&A acquisition. In the Americas, De Rigo reported sales of $10.8 million, a 5.6 percent increase, in line with its global sales growth rate.

The group's sales of eyewear frames at retail or wholesale rose by 69.1 percent in 1998/99, representing about 43.8 percent of total revenues as against 31.1 percent in the previous year, thanks largely to sales through the recently acquired British optical chain. Sales of sunglasses staged a worse performance, decreasing by 2.2 percent to 56.2 percent of total revenues.

Excluding D&A, sales through other foreign subsidiaries rose by 24.4 percent in 1998/99 to $27.7 million, thanks to the consolidation of Ranieri Argentina and De Rigo Hellas, while sales through independent distributors declined by 5.4 percent to $33.9 million.