Executives of Fielmann had no comment when asked whether their company was perhaps negotiating to acquire GrandVision now that the French-based optical retail chain has sold all its 472 photo shops, as we had anticipated in the last issue of EyeWear Intelligence. Another possible candidate may be LVMH, the giant French luxury goods group. Much will depend on the valuation of the company, whose shareholding is very diluted, facilitating a possible takeover bid.

The rumors about the disposal had raised GrandVision's stockmarket price by 9 percent to 22.34 euros, and the value has remained around that level since the announcement of the actual sale of the photo shops for a total of e282 million, equal to about 1.2 times sales and 8.2 times Ebit (earnings before interest and tax). The activities being sold are GrandVision's PhotoService and Photo Station stores in France, Belgium, Luxembourg and Switzerland. The buyer is a new holding company, called Photo Europe, in which the CinVen investment fund owns a 75 percent stake. The balance is in the hands of the personnel of the two chains and of a few minority shareholders including Michael Likiermann, co-founder of PhotoService and of GrandVision.

Following the disposal, Likierman, who shared the management of GrandVision with the group's other co-founder, Daniel Abittan, takes the back seat and becomes chairman of GrandVision's supervisory board. Abittan will continue to run single-handedly GrandVision's remaining operations in the optical retailing sector.

Anyhow, the sale of the photo shop has generated a capital gain of nearly e100 million, thus eliminating completely the relatively high debt that GrandVision had accumulated to finance its recent expansion. With an Ebit margin of about 12 percent, the group's photo shops have been more profitable than its optical stores lately, representing 60 percent of the operating profit with only 30 percent of the total turnover. Yet, GrandVision's management has restated its commitment to raise the optical retailing operations' Ebit margin to 10 percent by 2003. Margins in France and the UK are moving up toward a 6 percent ratio this year.

GrandVision still plans to add a total about 16 new optical stores to its network of about 500 outlets in the course of this year, and to sell its Vision Express stores in Argentina. The group trades under the GrandOptical, Générale d'Optique, Solaris and Vision Express banners in France, Belgium, Luxembourg, the UK, Ireland, Italy and Poland.