The Italian optical retail chain Nau! ended 2009 with sales of more than €5 million, twice the level booked in 2008. The trend in the first four months of 2010 indicates that it could double its turnover again this year, and the company is in preliminary talks to strike master franchising agreements in Eastern Europe and in the United Arab Emirates
About 80 percent of revenues were generated last year by prescription spectacles, thanks to their higher cost per unit, and the remainder by sunglasses. In volumes, sales were evenly split between the two types of eyewear.
The group said it is enjoying positive comparable sales. But, growth will be boosted by the increase of the network to around 40 stores by the end of the year from 29 currently. On March 25, the group opened a shop in Catania, Sicily. Until then, Nau! had limited its presence in the northern and central regions of Piedmont, Lombardy, Veneto, Liguria and Emilia-Romagna. The company is also building up a presence in airports and opened two stores at Milan's main Malpensa airport. Another store is scheduled to be opened at Verona's airport in May.
The chain sells only Nau! branded products and changes its collections about every 15 days. A typical store is around 100 m² in size and sells sunglasses and prescription frames for €19.90 to €69.90 a pair. Prescription frames can be fitted with Carl Zeiss Vision lenses.
Half of the group's stores are directly managed and the remainder are franchisees, but Nau! expects franchising to be the main growth engine for the expansion of the network. The average investment to set up a 100 m² store is roughly €90,000, plus a one-time entry fee of €10,000. Franchisees also have to pay an annual royalty totaling 5 percent of revenues.
On average a Nau! shop generates annual sales of more than €400,000. But the company's chairman, Fabrizio Brogi, noted that thanks the knowledge it has acquired about the market, the average for the latest openings has risen to around €500,000-600,000. The group was created in 2005 and spends about 5 percent of its revenues on advertising.