Exercising an option, HAL Holding has increased from 68 to 100 percent its shareholding in GrandVision, the large Paris-based holding company of GrandOptical, Générale d'Optique, Solaris, Vision Express and Visual. It has also signed a deal to acquire 94.7 percent of the shares in F-O Optika-Fotò, a large Hungarian-based chain, and applied to Russian authorities for permission to acquire 75 percent of Lensmaster, which is thought to be the largest optical retail chain in Russia.

That leaves only the UK and a few other European countries without a presence in optical retailing for HAL, which also raised last January its stake in Pearle Europe to 98.5 percent by acquiring from Luxottica an additional 21 percent shareholding in the operation. As reported, HAL also made its first investment in optical retailing in China last June, taking over Shanghai RedStar, the largest chain in the Shanghai area.

HAL had previously bid together with Moulin International for Cole National in order to acquire that 21 percent stake in Pearle Europe and its Pearle Vision franchise. The group, which is based in Monte-Carlo, Monaco, does not seem to be particularly interested at this stage in penetrating the U.S. market by making a bid for Eye Care Centers of America (ECCA), which is now controlled by the bankrupt Moulin. Observers speculate that ECCA's other major shareholder, Golden Gate, will eventually take over the remaining shares held by Moulin.

HAL continues to focus on Europe instead. A final deal should be closed very shortly for its takeover of F-O Optika-Fotò, which operates 102 stores in Hungary, including 12 franchises, and which has branched out into other neighboring countries. The Hungarian company also has 16 stores in Poland and 12 in the Czech Republic. It employed about 720 persons at the end of 2004, a year in which its consolidated sales amounted to approximately €34 million.

Lensmaster has a total of 22 stores, up from 12 at the beginning of 2005, and they are all in the Moscow area. It started off with only one store in 1996 or 1997. HAL is proposing to acquire an initial stake of 25 percent in the Russian chain, keeping its current management, and to raise it then gradually to 75 percent during the 2008-11 period, provided it gets the nod from the Russian authorities for this investment.

The complete takeover of GrandVision puts an end to a laborious tender for this juicy property, which has annual revenues of €700 million and more than 400 company-owned and 400 franchised stores in a 11 European countries and in Saudi Arabia. Greece is the latest country that GrandVision has entered, striking recently a partnership of Marinopoulos, a big retailer that also has partnerships with Marks & Spencer and FNAC, a French chain of book and home electronics shops. Two GrandOptical stores have been opened in Greece through this venture, and others are planned.

Following HAL's full takeover of his former shares, Daniel Abittan, who founded the French group together with Michael Likierman back in 1981, has resigned a chief executive of GrandVision to become non-executive chairman. He is expected to give his full attention now to a chain of photo shops that had been spun off from the group in 2001. Abittan now owns more than 90 percent of the shares in this operation. His son Jonathan remains at GrandVision, running its new chain of shops for hearing aids, GrandAudition.

Abittan's two long-time collaborators at GrandVision, Elie Vannier and Jean-Luc Seligman, will continue to run the company together with Mel Groot, who has led HAL's redeployment around the world. Groot, a Dutchman, will act as the new chief executive of the French-based group, but it could be determined whether the full takeover will lead to any major changes in strategy or in the re-distribution of the assets. Some of GrandVision's stores in Italy have been passed over to Avanzi, the Italian eyewear chain owned by Pearle Europe.

HAL declines to provide a breakdown of its optical retail outlets in each country. For the first six months of 2005, HAL has reported optical retail sales of €720 million, with a decline of 2.9 percent on a pro-forma same-store basis as compared to the same period of 2004. The drop was due to a large extent to lower sales for the stores of its German Apollo Optik chain in the first few months of the year as compared to the beginning of 2004, when customers bought the spectacles they had ordered just before the phase-out of German eye care subsidies.

The optical retailing activities of the group generated an operating profit of €83 million before interest, taxes and amortization of intangible assets during the 1st half of 2005, up from €68 million in the corresponding 2004 period, but the results were virtually unchanged if the effects of acquisitions were excluded.

The group's total net sales rose to €1,313 million during the period, with an increase of €185 million year-on-year that was almost exclusively due to the consolidation of GrandVision from the 2nd quarter of 2004. Income from investments in equities decreased. The net asset value rose by 20.9 percent to €2,280 million. HAL's net income increased to €105.4 million based on the new IFRS accounting guidelines, which exclude amortization of goodwill. That compares with €91.5 million before goodwill amortization and with €7.2 million after in the 1st half of 2004.

While continuing its shopping in the international optical retail market, HAL has divested a few important retail properties. It also announced last Oct. 5 the intended sale of an office products division by a Dutch subsidiary, Koninklijke Ahrend.