GrandVision, the French-based company that recently became a 100 percent owned subsidiary of HAL Holding, has acquired a 30 percent stake in Visilab, one of the leading optical retailers in Switzerland, in exchange for its six Swiss GrandOptical stores and for an unspecified cash payment. GrandVision also has a right of first refusal on the balance of the shares in the Swiss company, which continues to be run by Daniel Mori.
With this transaction, Visilab will get an estimated market share of 21 percent in Switzerland, coming very close to Fielmann which has reported sales of €83.7 million last year in the country. The combined optical sales of Visilab and GrandOptical in Switzerland amounted to about €80 million , not including hearing aids and other operations that pushed its total turnover up to 157 million Swiss francs (€96m-$130m). Prior to the deal, which was expected to be closed on Apr. 30, the Swiss company operated 52 stores under the Visilab banner and 17 others under the Kochoptik banner.
For greater impact on the market, the Swiss GrandOptical stores will be renamed as Visilab, although Kochoptik will remain as an alternative banner. This is in tune with a new policy followed by HAL to pare down the number of banners in certain countries where it has more than one. In Italy, for example, it has virtually completed a process whereby all its 106 eyewear stores in the country will trade under the Ottica Avanzi name, including 23 former GrandOptical stores and 50 others bought a couple of years ago from regional chains. They previously traded under the names of Eurottica and Vedo.
As we have previously reported, GrandVision is eliminating the Visual banner in France, proposing to the 250 independent retail members of that group to trade instead under the GrandOptical banner. A similar move is taking place in the Czech Republic where F-O Optika-Foto, the Hungarian company bought by HAL at the end of 2005, had 12 shops. The remaining ones are being renamed as GrandOptical, like the six stores owned by GrandVision in the country, forming a more meaningful chain of 16 outlets trading under the same name.
Before all these name changes, GrandVision transferred the ownership and the management of its stores in Italy, Portugal and the Czech Republic to Pearle Europe, another 98.3 percent owned subsidiary of HAL that runs the group's optical retail operations in 19 countries, mostly in Europe. Despite these transfers, GrandVision's direct revenues, excluding those of its franchisees, rose by 10 percent to €785 million in 2006, with a 2.9 percent increase in same-store sales. Its operating income grew to €80 million from €66 million. At the end of 2006 GrandVision had 580 stores in France, the UK and 11 other countries, including 179 franchises.
Same-store sales were up by 4.6 percent at Pearle Europe in 2006. Its direct revenues rose by 16 percent to €884 million with positive contributions from all countries, and its operating income increased to €138 million from €114 million. Pearle Europe had a network consisting of 2,084 stores at the end of 2006, including 608 franchises. Adding the franchisees' sales, GrandVision had a turnover of about €1 billion last year and Pearle Europe €1.1 billion.
Overall, HAL had a network of approximately 2,800 directly owned or franchised optical retail stores at the end of 2006, up from 2,500 six months ago, when the group completed its investments in Redstar in China and Lensmaster in Russia. They had ?system-wide? annual sales (including the franchisees' sales) of around €2.1 billion. The only acquisitions made in the second half of last year were the 76 franchised stores of Optikk Norge in Norway and the 85 stores of Krane-Optik in Germany, which together accounted for extra annual sales of €90 million for Pearle Europe.
The group is now #1 in Belgium, Finland and Denmark. It is #1 or 2 in the Netherlands. It is #2 in France, Germany, Austria and Norway, and it vies for second place in the UK and Italy, together with other retailers.
The optical retail sales of the companies controlled by HAL amounted to €1,676 million in 2006, up from €1,474 million in the previous year. Excluding exceptional items, their operating income increased to €219 million from €180 million.
Both GrandVision and Pearle Europe performed better last year than in 2005, when the French company's same-store sales rose by only 0.9 percent, while those of the Dutch company fell by 1.8 percent.
Furthermore the HAL group expanded its hearing aid retail activities last year through the acquisition of several companies operating a total of 168 stores, mostly in Germany, Italy, Belgium and the Netherlands. Together they will add annual sales of about €42 million.
Including other investments, the group's net asset value grew by €929 million last year, reaching €3,591 million after the distribution of dividends. Its consolidated net profit before minority interests increased to €496.8 million for the year from €311.6 million in 2005. Total group revenues rose by €126 million to €2,779 million, generating operating income of €593 million.
In the UK, meanwhile, Vision Express is launching a fairly aggressive expansion plan following the takeover of its parent company, GrandVision, by HAL Holding. It is planning to open between 20 and 25 new stores per year over a 5-year period in the UK and Ireland. Three-quarters of the stores will be joint ventures and one quarter will be company-owned.