The well-known French optical chain could well be interested in a partnership with a large foreign group, such as Pearle Europe for example, to sustain its expansion and to further improve its margins and its private label business now that its financial problems are over. A couple of years ago, Alain Afflelou, which recently bought Optique Carrefour, had struck a cooperation deal with Lissac's main owner, Evelyne Lissac, which was blocked by the family of Vincent Darnaud, the controlling shareholder of Logo who still owns about 9 percent of Lissac. In the end, Lissac's major shareholders decided to keep their shares because the price that Darnaud was prepared to pay at the time for a counterbid was considered to be too low.

These vicissitudes precipitated the walkout of several franchisees representing annual sales of about €12 million for the Lissac banner. However, after the appointment of a new general manager, Raouf Sabet d'Acre, Lissac stopped losing money last year, turning in a net profit of €365,000 against a loss of €617,000 in 2001. The gross margin improved by 2.1 percentage points to 65.5 percent and the company generated an operating profit (Ebitda) of 1,336,000.

The company had a total of 30 corporate stores and 30 others owned by franchisees. Sales at company-owned outlets grew by 5 percent to €29.4 million in 2002 and they increased by a further 2 percent in the first 6 months of 2003. Instead of opening any new stores, Lissac, which has no debt, has been spending a lot of money to renovate these stores, including its flagship on Paris' rue de Rivoli, using some innovative new display concepts.

Including sales of €14 million by the remaining franchisees, the Lissac banner generated relatively stable sales of €43.4 million (before sales taxes) in 2002, albeit down from the 2000 level of €52 million. Now that the network of franchises has been cleaned up, Lissac wants to increase the number of affiliated retailers, using a less strict concession contract and a new store format that is scheduled be launched next year.

The new management wants to raise from 20 to 30 percent the volume of private label items sold in its stores. Banking on its strong reputation in the area of children's eyewear, which represents about 20 percent of its sales, including some patented technologies, Lissac is also considering developing an international wholesale business in this product segment.