HAL Holding is the controlling shareholder of Pearle Europe, parent company of Apollo Optik, Avanzi, MultiOpticas and other optical retail chains in Europe. HAL International, a unit of the Dutch-based conglomerate, has increased again to over 20 percent its shareholding in Cole National Corp., which owns several optical retail chains in the USA including Pearle Vision, Sears Optical, Target Optical and BJs Optical.
Following an agreement signed in November of 1999, which allows HAL to acquire gradually up to 25 percent of Cole National, Melchert (Mel) Francs Groot, the Dutch executive who supervises HAL's majority stake in Pearle Europe, has been elected as a member of Cole National's board of directors, which has been expanded to 8 seats. Cole National already owns 21 percent of Pearle Europe, and Jeff Cole, chairman and CEO of Cole National, is already one of its directors.
It's probably safe to speculate that the increasing cross-ownership may lead to a more intense cooperation across the Atlantic Ocean between the two groups. This cooperation is largely limited for the moment to exchanges of information on systems and store layout. Including franchises, the two organizations have together nearly 3,000 optical retail units in 8 countries and in the Caribbean, with annual sales of about $1.5 billion. Pearle Europe operates over 900 optical stores in Europe. Cole National has 2,045 locations in the vision business, among other operations.
Last year, HAL had already raised from 15.6 to 19.7 percent its own stake in Cole National. HAL announced its increased investment last month after the US company confirmed its financial turnaround by reporting net income of $645,000 for the 1st quarter ended May 5, against a net loss of $1,356,000 in the same period a year ago. Operating income rose by 133 percent to $7,204,000, with higher earnings in each of its divisions.
Revenues rose by 4.9 percent to $270,291,000 in the quarter. On a comparable basis, Pearle Vision's sales declined by 0.5 percent because it didn't repeat an aggressive 50 percent off sales promotion that it had conducted in the year-earlier period, but its gross margin improved as a result. Comparable stores sales rose by 18.8 percent at Target Optical, whose store count increased by 22 units to 139 in the quarter.
Pearle Vision's franchisees, whose sales dropped by 1.9 percent in the 1st quarter, are being offered a new merchandise assortment, a new and more customer-focused store design and an expanded video training program. The franchisees are also being hooked up with Pearle Vision through a new intranet site, powered by Sightstreet.com, which will allow them to visually sample new frame products while providing contents and continuing education opportunities.
Furthermore, Cole National has decided to install Optical Dynamics' Q-2100 lens casting equipment at about 200 directly owned Pearle Vision stores by the end of this year, growing to 250 after 18 months. ODC's cost-effective technology will also be installed at Pearle Vision's central manufacturing facility and in one of Cole Licensed Brands' laboratories.