Seven months after the management buyout of this Italian optical, Salmoiraghi & Vigano can boast a relatively good performance, backed up by a strong advertising campaign which is absorbing between 5 and 6 percent of its turnover.

As previously reported, Salmoiraghi's top management team acquired a 10 percent stake in Italy's largest integrated optical retail chain last March 1, with two merchant banks, Arca Merchant and B&S Electra, buying the rest of the shares. The seller, De Rigo, got 50 million euros after buying the operation together with General Optica in Spain. Salmoiraghi's fiscal year now starts on March 1. Arca still plans to take the company public by 2003.

Salmoiraghi's revised business plan provides for an increase in sales outlets from the 1999 tally of 110 to 172 by 2003. Last March, the management had announced a total of 220 outlets by 2002, but the management has now decided to invest on fewer, yet larger outlets. Still, the number of outlets has already risen from 110 to 128 since the management buyout, and it should reach 132 by the end of the year.

Salmoiraghi generated a turnover of 60.2 billion lire (e31.1m-$25.8m) between March 1 and September 30, and it expects to close the new fiscal year with sales of 120 billion lire (e62m-$51m). This would represent a sales increase of 32.6 percent in only 10 months of activity, as compared to 90.5 billion lire sales for the 12 months of 1999. The increase is partly due to the opening of 2 new outlets, in addition to 15 shops that came with three recent acquisitions that brought with them a dowry of 10 billion lire (e5m-$4m) in annual sales. One chain in the Friuli region joined the chain with its 11 shops. Two other retailers in Sardinia and Lombardy came each with 2 shops. Their stores vary in dimensions, but they measure an average of 130 square meters. Salmoiraghi invested 9 billion lire (e4.5m-$4m) on the operation .

In the 7 months from March to September, the chain's operating profits stood at 14.8 percent, as compared to 14 percent for the 12 months of 1999. The management isn't ready yet to give updated figures for pre-tax profits, EBIT (6 percent in 1999) or net profits (2 % in 1999), but it warns that the recent acquisitions will weigh heavily on the final figures in terms of amortization charges.