<PAGE>
<PAGE>

                        SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C.

                                    FORM 10-K

   (Mark One)

   [X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                           SECURITIES EXCHANGE ACT OF 1934

                     For the fiscal year ended January 3, 1998

                                          OR

   [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                                SECURITIES ACT OF 1934 

                           Commission File Number 0-20001

                           NATIONAL VISION ASSOCIATES, LTD.
                  (Exact name of Registrant as specified in its charter)

                                         Georgia
                             (State or other jurisdiction of
                              incorporation or organization)

                                        58-1910859
                           (I.R.S. Employer Identification No.)

                                   296 Grayson Highway
                                  Lawrenceville, Georgia
                        (Address of principal executive offices)

                                          30045
                                        (Zip Code)

         Registrant's telephone number, including area code:  (770) 822-3600

               Securities registered pursuant to Section 12(b) of the Act:

                                            None


                                    Page 1 of 56<PAGE>
<PAGE>

               Securities registered pursuant to Section 12(g) of the Act:

                         Common Stock, par value $.01 per share

                                    (Title of Class)

     Indicate by check mark whether the registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act 
of 1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject 
to such filing requirements for the past 90 days.         Yes   X    No    
                                                              -----     -----

     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be contained, 
to the best of registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.                              [ X ] 

     The number of shares of Common Stock of the registrant outstanding as 
of February 3, 1998, was 20,819,955.  The aggregate market value of shares 
of Common Stock held by non-affiliates of the registrant as of February 3, 
1998, was approximately $103.6 million based on a closing price of $5.50 
on the NASDAQ Stock Market on such date.  For purposes of this computation, 
all executive officers and directors of the registrant are deemed to be 
affiliates.  Such determination should not be deemed to be an admission 
that such directors and officers are, in fact, affiliates of the registrant.

                   DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the following documents have been incorporated by reference 
into the parts indicated: the Company's definitive Proxy Statement for the 
1998 Annual Meeting of Shareholders to be filed with the Securities and 
Exchange Commission not later than 120 days after the end of the fiscal year 
covered by this report--Part III.

              The Exhibit Index is located at pages 24 - 26.


                                    Page 2 of 56<PAGE>
<PAGE>

                                       PART I

ITEM 1.   BUSINESS

     National Vision Associates, Ltd. (the "Company") is engaged in the 
retail sale of optical goods and services.  As of February 3, 1998, the 
Company operates a total of 447 vision centers, 418 of which are in the 
United States.  Pursuant to an agreement (the "Wal-Mart Agreement") with 
Wal-Mart Stores, Inc. ("Wal-Mart"), the Company operates, as of February 3, 
1998, 361 retail vision centers in stores owned and operated by Wal-Mart.  
As of the same date, the Company also operates 26 vision centers in Mexico 
pursuant to a license agreement (the "Mexico Agreement") with Wal-Mart de 
Mexico, S.A. de C.V. ("Wal-Mart Mexico").

     To reduce its dependence on Wal-Mart, and to create additional growth 
opportunities, the Company decided in 1997 to develop its own free-standing 
locations, initially through the acquisition of regional optical chains.  
As a result, in October 1997 the Company acquired Midwest Vision, Inc., a 
chain of 51 locations located primarily in Minnesota.  (See Note 4 to
consolidated financial statements.)

MARKETING STRATEGY

     The Company generally employs a marketing philosophy of offering 
quality and value with "customer satisfaction guaranteed."  Management 
constantly strives to identify new means of accomplishing its overall 
goal of being a low-cost provider of quality retail optical products.

VISION CENTER OPERATIONS

     Each of the Company's existing Wal-Mart vision centers occupies 
approximately 1,000 square feet in the front of the host store, with 
separate areas for merchandise display, customer service, contact lens 
fitting and a laboratory.  Services of independent optometrists are 
available from clinics which are approximately 500 square feet and located 
in, adjacent to, or nearby the vision center, depending on regulatory 
requirements.  Each vision center has a laboratory containing a patternless 
edging and fitting unit and other equipment that, coupled with the on-site 
inventory of frames, spectacle lenses, and contact lenses, allow the 
Company to give prompt, one-hour service to many customers who request 
quick delivery.  In each vision center, the Company maintains an 
on-premises inventory of approximately 1,200 eyeglass frames, 725 
pairs of spectacle lenses, and 550 pairs of contact lenses, together 
with assorted sunglasses, eyeglass cases, eyeglass accessories, and 
contact lens accessories.  Midwest Vision locations are comparable except 
that they carry less inventory and do not contain a laboratory.

OPTOMETRISTS

     A key element of the Company's business strategy is the availability 
of independent optometrists at clinics in, adjacent to, or nearby the 
Company's vision centers.  Additionally, the Wal-Mart Agreement requires 
that such services be available for a minimum of 48 hours per week to the 
extent permitted by applicable law.  These optometrists, whose activities 
and relationships with entities such as the Company are subject to state 
and local regulation, are not employed by, and receive no compensation from, 
the Company.  See "Government Regulation."  Such independent optometrists 
sublicense the eye examination facilities and equipment from the Company.


                                    Page 3 of 56<PAGE>
<PAGE>
     In January 1997, the Company completed various transactions related to
its relationship with each of Eyecare Leasing, Inc., which had previously
recruited optometrists for the Company pursuant to a consulting agreement,
and Stewart-Phillips, Inc., which had recruited optometrists practicing 
adjacent to the Company's vision centers in California.  The transactions 
involved the termination of such consulting agreement and transfer of 
the responsibilities of Stewart-Phillips, Inc. to a subsidiary of the 
Company.  (See Note 3 to consolidated financial statements.)

MANAGEMENT INFORMATION AND FINANCIAL SYSTEMS

     In 1996, the Company completed the installation of a new point of sale
system and a new perpetual inventory system in all domestic store locations.  
The system facilitates the processing of customer sales information and 
replenishment of store inventory by passing such information, including 
customer specific orders, to the Company's home office and Company in-house 
lens laboratory for further processing.

     The Company is in the process of developing an enhanced point of sale 
software system which is scheduled to be in the retail stores by the 
fourth quarter of 1999.  The primary purpose of the system is to upgrade 
data processing, broaden in-store capabilities, and improve the processing 
of managed care sales transactions.  In addition to the above improvements, 
the system will be designed to be Year 2000 compliant.

YEAR 2000 COMPLIANCE

     The majority of the Company's internal information systems are currently 
Year 2000 compliant or in the process of being replaced with fully-compliant 
new systems.  The Company has identified approximately 220 point of sale 
systems that require hardware upgrades to be Year 2000 compliant.  The total 
cost of software changes, hardware changes, and implementation is estimated 
to be approximately $650,000.  Costs related to hardware and new software 
purchases will be capitalized as incurred and amortized over three years.  
These new system modifications are expected to be completed in the second half
of 1999.

     Some of the Company's vendors, financial institutions, and managed care
organizations utilize equipment to capture and transmit transactions.  The 
Company is in the process of coordinating its Year 2000 compliance efforts 
with those of such organizations.  The estimated future cost of this 
transition is minimal.  No assurance can be given that such organizations 
will make their systems Year 2000 compliant.

     The Company will utilize both internal and external resources to 
reprogram, or replace, and test software for Year 2000 compliance.  The costs
of the Year 2000 project and the date on which the Company plans to complete
Year 2000 modifications are based on management's best estimates, which 
were derived utilizing numerous assumptions of future events including the 
continued availability of certain resources, third party modification plans 
and other factors.  However, there can be no guarantee that these estimates
will be realized and actual results could differ materially from those plans.

RELATIONSHIP WITH HOST COMPANIES

     Master Agreements
     -----------------

     The Company's relationship with each of Wal-Mart and Wal-Mart Mexico 
is governed by a master license agreement which grants a separate license 

                                    Page 4 of 56<PAGE>
<PAGE>
to the Company for each vision center.  Each agreement provides for the 
payment of minimum and percentage license fees and contains other customary 
terms and conditions.  Certain terms are described below:

<TABLE>
<CAPTION>

                                 Term of         Company
                               Each License      Options             Other
                               ------------      -------             -----

<S>                             <C>              <C>                   <C>
Wal-Mart                                         one for
 Agreement                      9 yrs.           three yrs.            1

Mexico
 Agreement                      5 yrs.           two for two           2
                                                 yrs.; one
                                                 for one yr.

</TABLE>

(1)  The Wal-Mart Agreement, as amended, provides that Wal-Mart is to offer 
     the Company the opportunity to open, no later than April 30, 2000, at 
     least 400 vision centers (including those currently open).  In January 
     1995, the Company made a lump sum payment in exchange for such commitment.
     Such payment is being amortized over the initial term of vision centers 
     opened after January 1, 1995.  In 1997, the Wal-Mart Agreement was amended
     to provide that, with one exception, all new vision centers opened after 
     1997 will be located in California and North Carolina.

(2)  The Company has a right of first refusal in Mexico for any store in which 
     Wal-Mart Mexico proposes to open a vision center.  The Mexico Agreement 
     contains a mutual non-competition agreement preventing each party from 
     dealing with other parties (excluding affiliates of the Company and 
     Wal-Mart Mexico) in Mexico for the operation of vision centers in a host
     environment.  The Mexico Agreement also contains provisions which 
     entitle each party to terminate the license for each vision center if
     such vision center fails to meet certain minimum sales requirements.

     The Company opened six vision centers in 1990 under the Wal-Mart 
Agreement and 54 such vision centers in 1991, with additional vision 
centers being opened in subsequent years.  Accordingly, beginning in 1999, 
the Company will determine whether to exercise the three-year options to 
extend the licenses for vision centers reaching the ninth year of operation.
The Company will make such decisions based upon various factors, including,
without limitation, the sales levels of each vision center, its estimated 
future profitability, increased minimum license fees charged by Wal-Mart 
during the option period, and other relevant factors.  Each option must be
exercised at least six months prior to the expiration of the license for 
each vision center.  Although the Company expects that it will extend the 
licenses of a substantial majority of these vision centers, no assurance can
be given as to the number of vision centers the licenses of which will be 
extended.



                                    Page 5 of 56<PAGE>
<PAGE>
     No Assurances of Expansion in Host Stores
     -----------------------------------------

     Future additional expansion in stores of any of the Company's hosts 
beyond those currently under contract is out of the control of the Company 
and there can be no assurance that any host will offer the Company any 
additional vision centers or that any such offer will be on terms that are 
the same as or similar to the terms contained in the current agreements.  
Management periodically discusses expansion opportunities and other matters 
with each host, but there can be no assurance that these discussions will 
result in additional vision centers being offered to the Company.  

     Wal-Mart operates its own optical division.  As of January 3, 1998, 
such division operated approximately 680 vision centers.  No assurance can 
be given that, after the Company has opened 400 locations pursuant to the 
Wal-Mart Agreement, Wal-Mart will not allocate all vision centers to its 
own optical division.

     The Company regularly explores opportunities to expand outside of its 
existing host environments and continues to consider various options, such 
as acquiring optical companies, opening free-standing vision centers, and 
expanding in another host environment.  Management currently believes that 
the Company's most likely avenue of additional expansion will be through 
the acquisition and development of free-standing locations.

     Manufacturing and Distribution
     ------------------------------

     The Company currently utilizes three in-house lens laboratories and 
one independent laboratory to manufacture prescription eyeglasses for its 
vision centers.  One such laboratory was owned by Midwest Vision and was 
acquired by the Company as part of that acquisition.  Substantially all 
prescription spectacle requirements of the Company's domestic vision centers 
opened in the future will be supplied from Company-owned laboratories.  The 
Company has a state-of-the-art coating facility in its Lawrenceville 
headquarters, capable of coating lenses with anti-reflective and mirror 
surfaces.  Each vision center in Wal-Mart stores has its own finishing 
laboratory which manufactures lenses for approximately half of all 
customers purchasing spectacle lenses.

     The Company's centralized distribution center in its Lawrenceville, 
Georgia headquarters facility provides lens blanks, frames, sunglasses 
and contact lenses to all vision centers.  The Company's central 
distribution center and all laboratories are interfaced with the Company's 
management information system.  The Company's central distribution center 
ships completed customer orders and inventory replenishment requirements, 
including frames, and spectacle and contact lenses, to the Company's vision 
centers throughout the United States by overnight delivery services.  The 
Company maintains a secondary distribution center at the Midwest Vision
regional headquarters, which primarily ships completed customer orders to
the Midwest Vision stores.



                                    Page 6 of 56<PAGE>
<PAGE>
     Government Regulation
     ---------------------

     The Company is subject to a variety of federal, state, and local 
laws, regulations, and ordinances, including state and local laws and 
regulations regarding advertising, qualifications and practices of 
the opticians employed by the Company, relations between independent 
optometrists and optical firms such as the Company, and various trade 
practices such as country of origin product labeling.  In addition, 
certain of the Company's products, specifically contact lenses and 
contact lens solutions, must comply with quality control standards 
set by the United States Food and Drug Administration.  Through its 
participation in Medicare and in managed care programs, the Company 
is also subject to a variety of other laws, such as the Federal Anti-
Kickback Statute and the Health Insurance Portability Act of 1996.

     Although government regulation has increased the cost to the 
Company of commencing operations and decreased its flexibility in managing 
its business, government regulation has not, to date, had a material 
adverse effect on the Company's overall operations or financial 
performance, or on its overall relationships with independent optometrists.  
It is nevertheless possible that new regulations or new interpretations of 
current regulations could materially increase the Company's cost of doing 
business or have a material adverse impact on the Company's sales by 
restricting or eliminating the services of opticians or optometrists in, 
adjacent to, or nearby the Company's vision centers.  This risk is enhanced 
since the Company's competitors often serve as, or exert influence on, 
local regulators of the eyecare industry.  Additional risk is created 
because of the Company's increasing involvement in managed care plans and 
general increased oversight by federal and state governments of managed 
care relationships and operations.  

     The Company believes it is in substantial compliance with all material 
governmental regulations applicable to its operations.  

     Competition
     -----------

     The retail eyecare industry in the United States is highly 
competitive.  In addition to optical chains such as Cole Vision and 
LensCrafters, there are numerous retail optical stores, individual retail 
outlets and individual opticians, optometrists, and ophthalmologists 
providing the public all or some of the goods and services the Company 
sells or makes available through its vision centers.  Optical retailers 
generally serve individual, local or regional markets, and, as a result, 
competition is fragmented and varies substantially among locations and 
geographic areas.  Several of the Company's competitors have financial 
resources substantially greater than those of the Company.

                                    Page 7 of 56<PAGE>
<PAGE>
     The Company believes that its primary competitive advantages are its 
locations in a prominent position in its host stores, its quality products 
and value at low prices, and its customer-driven service philosophy.  
Additionally, the Company competes on the basis of the quality and 
consistency of service, convenience, speed of delivery, and selection.

     In addition to competition for individual patients, there is 
increasing competition in the eyecare industry for managed care contracts 
with insurance companies, employers, and other groups.  The Company 
believes that the competitive advantages described above will help the 
Company compete for managed care contracts.  The density and size of a 
vision care network are also a significant competitive aspect, however.
Several other optical chains, as well as other organizations of vision 
care providers, have more service locations and cover more geographical 
areas than does the Company.

     Mexican Operations
     ------------------

     RISKS.  The Company's Mexican operations face risks substantially 
similar to those faced by the Company in connection with its domestic 
operations, including dependence on the host store and expansion 
requirements.  There can be no assurance that such operations will be 
able to attain profitability.  In addition, such operations expose the 
Company to all of the risks arising from investing and operating in 
foreign countries generally, including a different regulatory, political, 
and governmental environment, currency fluctuations, currency devaluations, 
inflation, price controls, restrictions on profit repatriation, lower per 
capita income and spending levels, import duties and other impediments to 
the delivery of inventory and equipment to vision center locations, 
value-added taxes, and difficulties of cross-cultural marketing.  

     ECONOMIC AND POLITICAL ENVIRONMENT.  Regulations in Mexico do not 
currently include currency controls, restrictions on profit repatriation, 
limitations on foreign ownership, or restrictions on sourcing of products 
that would adversely affect the Company's operations.  The cumulative 
translation adjustment in shareholders' equity for operations in foreign 
countries at January 3, 1998 was $4.1 million. 


                                    Page 8 of 56<PAGE>
<PAGE>
     As a result of inflation in prior years, the Company has in the past 
adjusted its retail pricing.  Further pricing adjustments are contingent 
upon competitive pricing levels in the marketplace.  Management is monitoring 
the continuing impact of these inflationary trends.

     The Securities and Exchange Commission has qualified Mexico as a highly 
inflationary economy under the provisions of SFAS No. 52, "Foreign Currency 
Translation".  Consequently, in 1997, the financial statements of the
Mexico operation were remeasured with the U.S. dollar as the functional
currency.  During 1997, an immaterial loss resulted from changes in foreign 
currency rates between the peso and the U.S. dollar, as calculated in the 
remeasurement process, and was recorded in the Company's statement of 
operations.

     Trade Names and Trademarks
     --------------------------

     The Wal-Mart Agreement provides that, in connection with its Wal-Mart 
vision centers, the Company must use the tradename "Vision Center located 
in Wal-Mart" and indicate that the vision centers are operated by the 
Company.  Vision centers in stores owned by Wal-Mart Mexico do business 
under the name "Centro de Vision."  The Company also has licensed the 
right to use the "Gitano" and "Guy Laroche" trademarks in its domestic 
vision centers pursuant to license agreements providing for royalty 
payments and containing other customary terms and conditions.  The 
Gitano agreement expired on June 30, 1997.  Discussions concerning 
extension of the Gitano agreement are in progress.  The Guy Laroche 
agreement expires December 31, 2001.

     Employees
     ---------

     As of January 3, 1998, the Company employed 2,040 associates on a 
full-time basis and 819 associates on a part-time basis, of whom 2,468 
were engaged in retail sales, 188 in laboratory and distribution operations, 
and 203 in management and administration.  Apart from its Mexican employees, 
none of the associates employed by the Company are covered by any collective 
bargaining agreements.  All associates (with the exception of home office 
personnel) employed in the Company's Mexican operations are covered by 
collective bargaining agreements.  The Company considers its employment 
relations to be good, and to date the Company has not experienced any 
significant difficulties in staffing its vision centers.



                                    Page 9 of 56<PAGE>
<PAGE>

     Foreign and Domestic Operations
     -------------------------------

     See Note 14 to the consolidated financial statements contained 
elsewhere in this report for additional information regarding the 
Company's foreign and domestic operations.

ITEM  2.   PROPERTIES

     The Company's 413 domestic vision centers in operation as of 
January 3, 1998 are located in the following states:

Alabama                7              New Hampshire            4
Alaska                 5              New Jersey              12
Arizona               14              New Mexico              10
California            78              New York                26
Colorado               8              North Carolina          37
Connecticut            9              North Dakota            10
Florida                4              Oregon                   9
Georgia               36              Pennsylvania            18
Hawaii                 4              South Carolina          11
Iowa                   7              South Dakota             1
Kansas                10              Tennessee                1
Kentucky               1              Texas                    6
Louisiana              1              Virginia                20
Maryland               3              Washington               3
Massachusetts          4              West Virginia            7
Minnesota             33              Wisconsin                4
Montana                2              Wyoming                  1
Nevada                 7              



     The Company's foreign vision centers in operation as of January 3, 
1998 are located in the following countries:  

                  Czech Republic and Slovakia         3
                  Mexico                             26

     The Company's home office is located in approximately 66,000 square feet 
of space in Lawrenceville, Georgia, and is subleased from Wal-Mart through 
the year 2001 (with an option to renew for approximately seven additional 
years).  The Company's central distribution center, an anti-reflective and 
mirror coating facility, and a lens laboratory are located in the Company's 
Lawrenceville headquarters. 

     The Company has regional headquarters located in St. Cloud, Minnesota, 
which is subject to a lease with a term expiring on October 1, 2007.  This 
facility also contains a full-service optical laboratory.

     The Company's Los Angeles laboratory is also held under lease, which 
was cancelled effective February 1998.  The Company has entered into a lease 
(which expires in December 2002) for a successor facility in the Los Angeles
area. 

                                    Page 10 of 56<PAGE>
<PAGE>
ITEM 3.   LEGAL PROCEEDINGS

     The Company is not currently a party to any legal proceedings the result 
of which management believes could have a material adverse effect upon its 
business or financial condition.  The Company is currently the defendant 
in a lawsuit (Commercial Court of Paris, Case No. RG 95 108253) in France 
arising out of the Company's sale of its French operations.  The suit was 
initiated on December 6, 1995 by Grand Optical Photoservice, S.A. ("GPS") 
to block the Company's sale of its French operations to a third party.  GPS 
claims that, in selling its French operations to a third party, the Company 
breached a letter of intent it had previously signed with GPS.  By a decision 
dated December 14, 1995, the trial court rejected the plaintiff's claims 
and fined the plaintiff for filing a frivolous claim.  The plaintiff has 
filed an appeal.  The Company believes that the plaintiff's claims are 
without merit.

     The Company received, with respect to the 1992 tax year, a deficiency 
notice (dated September 11, 1996) from the Internal Revenue Service ("IRS") 
asserting, among other claims, that the Company was not entitled to a certain 
deduction in the amount of $4,353,367 (relating to the exercise of certain 
stock options - see Note 5 to consolidated financial statements).  The Company 
vigorously disputes these allegations.  Through its counsel, the Company 
filed a petition in October 1996 in the U.S. Tax Court (Docket No. 23670-96), 
contesting the deficiency notice.  Subject to the execution of definitive
settlement documents, the Company and the IRS have agreed to settle the 
litigation.  The settlement would provide that the Company receive 
substantially all of the deduction it seeks.  (See Notes 5, 9, and 16 to 
consolidated financial statements.)

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to a vote of security holders during the last 
quarter of fiscal 1997.



                                    Page 11 of 56<PAGE>
<PAGE>

                                           PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     The Company's Common Stock is traded on the NASDAQ National Market System 
under the symbol "NVAL".

     The following table sets forth for the periods indicated the high and low 
closing prices of the Company's Common Stock in the over-the-counter market on 
the NASDAQ National Market System.

<TABLE>
<CAPTION>


         Quarter Ended                             High           Low 
         -------------                             ----           ---
         <S>                                       <C>           <C>
         1996   March 30                           $3.625        $2.50
                June 29                            $5.125        $3.00 
                September 28                       $5.125        $4.00 
                December 28                        $4.563        $3.25 

         1997   March 29                           $5.500        $3.875
                June 28                            $5.250        $4.250
                September 27                       $5.250        $4.063
         1998   January 3                          $6.125        $5.125


</TABLE>
     As of January 3, 1998, there were approximately 630 holders of record 
of the Company's Common Stock.

     It is the present intention of the Company's board of directors not 
to pay dividends but rather to use the Company's cash resources for the 
expansion of its operations, acquisitions and repayment of the Company's 
revolving credit facility.  Future dividend policy will depend upon the 
earnings and financial condition of the Company, the Company's need for 
funds, and other factors.



                                    Page 12 of 56<PAGE>
<PAGE>
ITEM 6.   SELECTED FINANCIAL DATA

     The following selected financial data of the Company with respect to 
the consolidated financial statements for the years ended December 31, 
1993, 1994, December 30, 1995, December 28, 1996 and January 3, 1998 is 
derived from the Company's consolidated financial statements.  The selected 
financial data set forth below should be read in conjunction with the 
consolidated financial statements and notes thereto included elsewhere 
herein.   For information on dispositions of certain business operations, 
see Note 14 to consolidated financial statements.
<TABLE>
<CAPTION>
                                                   1993       1994 (1)         1995 (2)          1996 (2)       1997 (2)(6)
                                                   ----       --------         --------          ----           ----
                                                           (000's except per share information and statistical data)
<S>                                               <C>         <C>              <C>             <C>             <C>
STATEMENTS OF OPERATIONS DATA:
Net Sales                                         $88,340     $119,395         $145,573        $160,376        $186,354
Cost of Goods Sold                                 41,445       53,898           67,966          76,692          86,363
                                                  -------     --------         --------        --------        --------
Gross Profit                                       46,895       65,497           77,607          83,684          99,991
Gross Profit Percentage                               53%          55%              53%             52%             54%
Selling, General, and Administrative 
  Expenses                                         48,602       63,911           74,390          76,920          89,156
Provision for Dispositions (3)                      7,727           --              958              --              --
Other Nonrecurring Charges (3)                      2,750           --            1,053              --              --
Stock Compensation Expense (3)                        834           --               --              --              --
                                                  -------     --------         --------        --------        --------
Operating Income (Loss)                           (13,018)       1,586            1,206           6,764          10,835
Other Income (Expense), Net                           154       (1,195)          (2,626)         (2,084)         (1,554)
                                                  -------     --------         --------        --------        --------
Income (Loss) Before Income Taxes                 (12,864)         391           (1,420)          4,680           9,281
Income Tax Benefit (Expense)                          900          (40)            (100)         (1,200)         (3,708)
                                                  -------     --------         --------        --------        --------
Net Income (Loss)                                $(11,964)    $    351         $ (1,520)       $  3,480        $  5,573
                                                 ========     ========         ========        ========        ========

Basic Earnings (Loss) Per Common Share (4)       $   (.59)    $    .02         $   (.07)       $    .17        $    .27
                                                 ========     ========         ========        ========        ========
Diluted Earnings (Loss) Per Common Share (4)     $   (.59)    $    .02         $   (.07)       $    .17        $    .27
                                                 ========     ========         ========        ========        ========

Earnings (Loss) before Interest, Taxes,          $ (7,506)    $  9,153         $ 11,584        $ 16,922        $ 21,870
  Depreciation and Amortization
As a Percentage of Sales                            (8.5%)        7.7%             8.0%           10.6%           11.7%

STATISTICAL DATA (UNAUDITED):
Domestic Vision Centers Open at 
  End of Period                                       186          261              319             320             443
Mexico and Eastern Europe Vision 
  Centers Open at End of Period                        19           30               26              21              29
Average Weekly Consolidated Sales
  Per Vision Center (5)                           $10,200      $ 9,500           $8,700          $9,300          $9,400
Average Weekly Sales Per Domestic
  Vision Center (5)                               $11,000      $10,100           $9,100          $9,600          $9,800
Average Weekly Sales Per Vision Center
  in Mexico (5)                                   $ 6,800      $ 4,100           $2,900          $2,700          $2,700
</TABLE>
                                    Page 13 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                                1993        1994(1)         1995(2)        1996 (2)     1997 (2)(6)
                                                ----        -------         -------        ----         ----
<S>                                            <C>          <C>            <C>            <C>           <C>
BALANCE SHEET DATA:
Working Capital                                $ 6,954      $ 8,723        $14,556        $13,502       $12,171
Total Assets                                    66,172       77,612         81,237         74,564        83,250
Long-Term Debt and Capital Lease 
   Obligations                                  15,135       30,479         38,000         26,500        23,725
Shareholders' Equity                            31,577       29,613         26,326         29,906        36,368
Long-Term Debt and Lease Obligations
   as a Percentage of Shareholders'
   Equity                                          48%         103%           144%            89%           65%

</TABLE>


(1)      Financial information for 1994 includes results of international 
         operations for the 11 months ended November 30, 1994.  

(2)      Financial information for 1995 and subsequent years include results 
         of international operations for the 12 months ended November 30.  
         See Note 2 to consolidated financial statements.

(3)      In 1995, the Company decided to dispose of its non-core business 
         operations, resulting in a $2 million provision.  See Note 14 to
         consolidated financial statements.  In 1993, the Company recorded
         provisions for nonrecurring charges related to the disposition of 
         the Canada business, termination of a proposed acquisition of a 
         frame manufacturer, write off of capitalized costs for a point of 
         sale system, and compensation expense associated with certain stock
         options granted to employees of the Company.

(4)      In 1997, the Company adopted SFAS No. 128, "Earnings per Share".  
         Basic earnings per common share were computed by dividing net 
         income by the weighted average number of common shares outstanding 
         during the year.  Diluted earnings per common share were computed 
         as basic earnings per common share, adjusted for outstanding stock 
         options that are dilutive.  Outstanding options with an exercise 
         price below the average price of the Company's common stock have 
         been included in the computation of diluted earnings per common 
         share, using the treasury stock method, as of the date of the grant. 
         Stock options have been excluded from the calculation of weighted 
         average shares outstanding during 1993 and 1995, as the effect would 
         be antidilutive.  All earnings per share calculations for 1993 
         through 1996 have been restated to conform with SFAS No. 128.

(5)      Calculated from sales from each month during the period divided by 
         the number of store weeks of sales during the period, excluding 
         stores not open a full month.

(6)      Effective January 1, 1995, the Company changed its year end to a 
         52/53 week retail calendar (see Note 2 to consolidated financial
         statements).  Fiscal 1997 consisted of 53 weeks ended January 3, 
         1998.  Sales for the 53rd week approximated $3.0 million in 
         fiscal 1997.

                                    Page 14 of 56<PAGE>
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
         RESULTS OF OPERATIONS 

Results of Operations
---------------------

     The Company's results of operations in any period are significantly 
affected by the number of vision centers opened and operating during such 
period.  Given the Company's rapid expansion to 443 vision centers at 
January 3, 1998, and dispositions of significant operating units (both 
domestic and foreign), period-to-period comparisons may not be meaningful 
and the results of operations for historical periods may not be indicative 
of future results.  

     Effective January 1, 1995, the Company changed its year end to a more 
standard 52/53 week retail calendar with the fiscal year ending on the 
Saturday closest to December 31.  Fiscal 1997 consisted of 53 weeks.  Sales
for the 53rd week approximated $3.0 million in fiscal 1997.  International 
operations are reported using a fiscal year ended November 30.  (See Note 2 
to consolidated financial statements.)

Year Ended January 3, 1998 ("fiscal 1997") Compared to 
Year Ended December 28, 1996 ("fiscal 1996")
------------------------------------------------------

Consolidated Results
--------------------

     NET SALES.  Net sales during fiscal 1997 increased to $186.4 million 
from $160.4 million for the prior year.  Such increase was due to a 6.8%
increase in comparable store sales for domestic vision centers as well as 
an increase in the number of domestic vision centers.  Consolidated average
weekly net sales per vision center increased 1.1% from $9,300 during fiscal 
1996 to $9,400 during fiscal 1997.  Such improvement was due primarily to 
the increase in comparable store sales on the domestic business, offset in 
part by the acquisition in the fourth quarter of 1997 of Midwest Vision, 
Inc., a 51 unit retail optical company with annual sales in 1997 of 
approximately $14.4 million.  Average weekly net sales for vision centers 
open less than one year were lower than the average for vision centers 
open less than one year in fiscal 1996.

     Continued success of "life style" selling programs, improved 
merchandising and product presentation, as well as continued focus on 
customer service, contributed to the sales improvement.  In stores open 
for more than one year, average spectacle unit sales per week and the 
average spectacle transaction value increased over that attained in fiscal 
1996.  In addition, sales under managed care programs increased from the 
prior year.

     Net sales from international operations increased from $3.8 million 
in the 12-month period ending November 30, 1996 to $4.0 million in the 
comparable period ending November 30, 1997.  The increase is attributable 
primarily to new store openings.

     GROSS PROFIT.  For fiscal 1997, gross profit increased to $100.0 
million from $83.7 million in the prior year.  This increase was due 
to the increase in net sales described above.  Gross profit percentage 
increased from 52.2% in 1996 to 53.7% in 1997.  Gross profit percentage 
was positively affected primarily by increased receipts of occupancy fees 
from independent optometrists as a result of the ELI and SPI transactions 
which closed in January 1997 (see Note 3 to consolidated financial 
statements).  Additionally, the Company's focus on lifestyle selling 
contributed to the improvement in gross profit percentage.

                                    Page 15 of 56<PAGE>
<PAGE>
     SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES ("SG&A expense").
SG&A expense (which includes both store operating expenses and home 
office overhead) increased to $89.2 million in fiscal 1997 from 
$77.0 million in 1996.  As a percentage of net sales, SG&A expense was 
47.8% in 1997, compared to 48.0% for 1996.  The decrease was due primarily 
to improved efficiencies at store level partially offset by increases in 
administrative expenses related to responsibilities assumed in connection 
with the ELI and SPI transactions which closed in January 1997 and transition 
costs resulting from the acquisition of Midwest Vision, Inc.  (See Notes 3 
and 4 to consolidated financial statements.)

     OPERATING INCOME.  Operating income for fiscal 1997 increased to 
$10.8 million from $6.8 million in 1996 representing an increase in 
operating margin from 4.2% in 1996 to 5.8% in 1997.  In addition, the 
Company's international operations (29 vision centers at November 30, 
1997) generated an operating loss of $28,000 in fiscal 1997, as opposed
to an operating loss of $612,000 in the comparable period a year ago.
International operating results do not include allocated corporate
overhead, interest, and taxes.

     OTHER EXPENSE.  The decrease in other expense to $1.6 million, 
compared to $2.1 million in 1996, is due, for the most part, to 
reduced interest expense, resulting from the reduction of outstanding
borrowings under the Company's credit facility. (See Note 11 to 
consolidated financial statements.)

     PROVISION FOR INCOME TAXES.  The effective income tax rate on 
consolidated pre-tax income is 40%, which represents a tax provision 
of 39% on domestic earnings.  Due to the Company's tax net operating 
loss carryforward position, current year earnings will not be subject 
to regular Federal Income Tax.  However, the Company will be subject 
to Federal Alternative Minimum Tax and state income tax, which will 
result in the Company making cash payments approximating 24% of 
consolidated pre-tax earnings.  In 1998, the Company anticipates
making cash payments for Federal and State income taxes approximating
27% of consolidated pre-tax earnings.

     NET INCOME.  Net income was $5.6 million, or $0.27 per share, as
compared to net income of $3.5 million, or $0.17 per share, in 1996.
The increase in net income of $2.1 million over fiscal 1996 represents a 
60% increase in net income on a sales increase of 16%.

Year Ended December 28, 1996 Compared to Year Ended December 30, 1995
---------------------------------------------------------------------

Consolidated Results
--------------------

     NET SALES.  1996 net sales increased to $160.4 million from $145.6 
million for 1995, due to the net effect of the following: (a) an increase
in the number of domestic vision centers; (b) a 4% increase in comparable
sales for domestic vision centers (those open for at least one year); and
(c) a reduction in revenues resulting from the disposition and closure 
of businesses in the fourth quarter 1995 and the first quarter 1996.  
Consolidated average weekly net sales per vision center increased from 
approximately $8,700 in 1995 to $9,300 in 1996 due primarily to the 
disposition of underperforming vision centers in certain domestic operations
and Mexican operations.  The improvement in average weekly net sales for 
comparable domestic stores was partially offset by a reduction in average 
weekly net sales for vision centers opened in 1996.

                                    Page 16 of 56<PAGE>
<PAGE>
     In the first quarter of 1996, the Company implemented a new merchandising
program for spectacles.  Initially, the new program served to increase the 
average number of sales transactions per vision center (market share) 
over the prior year, but at a lower dollar value per transaction.  The 
Company experienced an increase in average number of transactions per 
vision center for the remainder of the year.  In the latter part of 1996, 
the average transaction value increased.  For the year, the improvement 
in sales resulting from market share increases more than offset the effect 
on sales resulting from the decline in the average transaction value.  

     Consistent with the trend experienced in 1994 and 1995, average 
weekly sales volumes for new domestic vision centers opened in 1996 were
lower than vision centers opened in the previous year.  The effect of 
lower new store results in 1996, which had a negative impact on consolidated
average weekly sales, was offset by an increase in average weekly sales
for stores opened in 1995 and 1994.  

     GROSS PROFIT.  Gross profit in 1996 increased to $83.7 million from
$77.6 million in 1995, primarily because of increased net sales.  Gross 
profit as a percentage of sales declined from 53.3% in 1995 to 52.2% in 
1996.  The Company maintained margins from product sales at store level,
but margins were negatively affected by a reduction in promotional
monies from vendors (because of fewer store openings) and increased
freight costs related to the reset of store inventory planograms.

     SELLING, GENERAL, AND ADMINISTRATIVE ("SG&A") EXPENSES.  SG&A expenses
(which include both vision center operating expenses and home office
overhead) increased to $77.0 million in 1996 from $74.4 million in 1995,
reflecting the addition of new vision centers in 1996.  Average weekly
store expense per vision center remained constant.  As a percentage of
sales, SG&A expenses decreased from 51.1% in 1995 to 48.0% in 1996.  The
decrease was attributable to comparable store sales increases achieved
during 1996 and to continued improved efficiencies in the operation of 
administrative offices.

     OTHER EXPENSE.  Other expense decreased from $2.6 million in 1995 
to $2.1 million in 1996 due to a decrease in average borrowings by the 
Company under its credit facility, in addition to a reduction in the 
effective interest rate paid by the Company in 1996 versus 1995.  

     PROVISION FOR INCOME TAXES.  The effective income tax rate in 1996
was 26%.  In light of the disposition of the unprofitable Venture domestic 
operations in the first quarter of 1996 (see Note 14 to consolidated 
financial statements), the Company reassessed the realizability of 
domestic net operating loss carryforwards and accordingly reduced the 
valuation allowance in 1996.  

     NET INCOME.  In 1996, the Company achieved net income of $3.5 million,
or $0.17 per share, as compared to a net loss of $1.5 million, or $0.07
per share in 1995.  Results of operations for 1995 included charges 
approximating $2 million.  (See Note 14 to consolidated financial 
statements.)

                                    Page 17 of 56<PAGE>
<PAGE>
International Results in Fiscal 1996
------------------------------------

     At November 30, 1996, the Company operated 21 vision centers 
internationally versus 36 vision centers at November 30, 1995.  International
locations included 18 in Mexico and two and one in the Czech Republic
and Slovakia, respectively.  Financial results for international operations
during 1996 are based on the 12 months ended November 30. (See Note 2 to
consolidated financial statements.)

     NET INTERNATIONAL SALES.  Net international sales for the 12 months 
ended November 30, 1996 were $3.8 million, a decrease from $8.9 million 
during the 12 months ended November 30, 1995.  Such decrease was principally
due to closure of vision centers in France and in Mexico.

     GROSS PROFIT.  Gross profit decreased to $1.6 million from $4.4 million
in 1995, primarily the result of the decreased sales.  Gross profit as a 
percentage of sales declined from 49% in 1995 to 43% in 1996, due primarily 
to the effect of selling the French operation, which realized a higher gross 
profit percentage than the average for the international business.

     SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES EXCLUDING INTERCOMPANY
ALLOCATIONS.  SG&A expense decreased from $5.8 million for the 12 months
ended 1995 to $2.0 million for the 12 months ended November 30, 1996, as
a result of the dispositions mentioned above.  SG&A expense as a percentage
of sales decreased to 53% for the 12 months ended November 30,
1996 from 65% of sales for the 12 months ended November 30, 1995.  Reductions
in selected expenses at store level coupled with favorable leveraging of 
administrative expense reduced SG&A expense as a percentage of sales.

     OPERATING LOSS.  The operating loss for international operations does not
include allocated corporate overhead, interest or taxes.  International 
operations generated a net operating loss of $612,000 in the 12 months ended
November 30, 1996, as opposed to net operating loss of $1.3 million in the 
12 months ended November 30, 1995.  Mexican operations generated an operating
loss of $294,000 in the 12 months ended November 30, 1996.

Inflation
---------

     Although the Company cannot determine the precise effects of inflation, 
it does not believe inflation has had a material effect on its domestic 
sales or results of operations.  The Company cannot determine whether 
inflation will have a material long-term effect on its sales or results of 
operations.  Continued inflation in Mexico may cause consumers to reduce 
discretionary purchases such as eyeglasses.

     As a result of inflation in prior years, the Company has in the past 
adjusted its retail pricing.  Further pricing adjustments are contingent 
upon competitive pricing levels in the marketplace.  Management is monitoring 
the continuing impact of these inflationary trends.


                                    Page 18 of 56<PAGE>
<PAGE>
Liquidity and Capital Resources
-------------------------------

     In July 1997, the Company entered into a two-year $45 million revolving 
credit facility syndicated by a major regional bank.  The Company's credit 
facility contains, among other covenants, a material adverse change clause 
and certain minimum net worth and other requirements.  As of January 3, 1998, 
the Company had borrowed $19.5 million under its credit facility versus 
outstanding borrowings of $26.5 million as of December 28, 1996.

     During 1997, store openings and other capital requirements as well as 
the acquisition of Midwest Vision, Inc. were funded through internal cash 
flow.  The acquisition of Midwest Vision, Inc. included a cash payment of 
$1.9 million, issuance of a debt instrument in the principal amount of 
$620,000 payable over five years, and issuance of 110,795 shares of common 
stock.  Additionally, the Company made cash payments of $239,000 related to 
investment advisory fees and other costs directly related to the acquisition.
Subsequent to the close date, the Company paid off long-term debt of $1.4 
million assumed in the transaction.

     The Company issued unsecured promissory notes relative to various 
transactions completed with ELI and SPI and to the Midwest Vision acquisition.
(See Notes 3 and 4 to consolidated financial statements.)  The notes are 
fixed rate instruments, with rates ranging from 6.4% to 8.5%.  The promissory 
notes with ELI and SPI require quarterly payments through January 2009 
whereas the Midwest Vision note requires monthly payments through October 
2002.  The fair market value of the promissory notes are approximately 
$80,000 less than book value at January 3, 1998.

     The Company has entered into rate swap agreements which effectively 
convert underlying variable rate debt based on LIBOR to fixed rate debt.  
The agreements extend through February 20, 2000.  The notional principal 
amount on one agreement is $20 million, with an effective fixed rate of 
6.93%, which will expire on February 20, 1998.  At that date, two separate 
agreements will commence with an aggregate notional principal amount of 
$10 million and an effective fixed rate which averages 7.52%.  At January 3,
1998, the fair market value of the fixed rate hedges approximates book 
value.  Under existing accounting standards, this activity is accounted 
for as a hedging activity.  The swaps are settled every 90 days.

     The Company maintains an unsecured line of credit agreement with a 
financial institution which, at the discretion of the lender, allows the 
Company to borrow up to $5 million.  The agreement is available to fund
financing needs on a short-term basis at a variable interest rate, determined 
by the lender.  As of year-end, there were no borrowings outstanding under 
the agreement.

     As of January 3, 1998, the Company plans to open (exclusive of any 
vision centers obtained through acquisitions) approximately 35 domestic 
and approximately 6 Mexican vision centers during 1998.  Consistent with 
prior years, the number of ultimate openings is dependant on the 
construction schedules of the host store.  In fiscal 1998, the Company 
has a goal to attain an approximate 20% increase in store growth through 
new store openings in existing businesses and through acquisitions.  The 
Company's ability to attain such goal will depend upon the risk factors 
described below.  Average costs for opening domestic vision centers have 
approximated $140,000 for fixed assets and $35,000 for inventory.  The Company
incurs approximately $20,000 for preopening expenses for each opening of a 
domestic vision center.  Prior to 1998, such costs were capitalized and 
amortized over 12 months.  Effective in 1998, such costs will be expensed as 
incurred in accordance with proposed AICPA Statement of Position, "Reporting 

                                    Page 19 of 56<PAGE>
<PAGE>
on the Costs of Start-Up Activities".  Capital for leasehold improvements and
other fixed assets in Mexican vision centers should approximate $75,000 
per vision center.  

     At January 3, 1998, the Company had borrowed $19.5 million under its 
credit facility.  The Company anticipates that internally generated funds, as 
well as funds available under the Company's revolving credit facility, will 
be sufficient to fund ongoing operating costs associated with its current 
vision centers, vision centers currently scheduled to be opened during 
1998, and any vision centers which may be acquired by the Company during 1998.

Year 2000 Compliance
--------------------

     The majority of the Company's internal information systems are currently 
Year 2000 compliant or in the process of being replaced with fully-compliant 
new systems.  The Company has identified approximately 220 point of sale 
systems that require hardware upgrades to be year 2000 compliant.  The total 
cost of software changes, hardware changes, and implementation is estimated 
to be approximately $650,000.  Costs related to hardware and new software 
purchases will be capitalized as incurred and amortized over three years.  
These new system modifications are expected to be completed in the second half
of 1999.

     The Company is in the process of developing an enhanced point of sale 
software system which is scheduled to be in the retail stores by the fourth 
quarter of 1999.  The primary purpose of the system is to upgrade data 
processing, broaden in-store capabilities, and improve the accuracy of 
processing managed care sales transactions.  In addition to the above 
improvements, the system will be designed to be Year 2000 compliant.

     Some of the Company's vendors, financial institutions, and managed care
organizations utilize equipment to capture and transmit transactions.  The 
Company is in the process of coordinating its Year 2000 compliance efforts 
with those of such organizations.  The estimated future cost of this 
transition is minimal.  No assurance can be given that such organizations 
will make their systems Year 2000 compliant.

     The Company will utilize both internal and external resources to 
reprogram, or replace, and test software for Year 2000 compliance.  The costs
of the Year 2000 project and the date on which the Company plans to complete
Year 2000 modifications are based on management's best estimates, which 
were derived utilizing numerous assumptions of future events including the 
continued availability of certain resources, third party modification plans 
and other factors.  However, there can be no guarantee that these estimates
will be realized and actual results could differ materially from those plans.

Derivative Financial Instruments
--------------------------------

     MARKET RISK.  Market risk is the potential change in an instrument's 
value caused by, for example, fluctuations in interest and currency exchange 
rates.  The Company's primary market risk exposures are interest rate risk
and the risk of unfavorable movements in exchange rates between the U.S. 
dollar and the Mexican peso.  Monitoring and managing these risks is a 
continual process carried out by senior management, which reviews and 
approves the Company's risk management policies.  Market risk is managed 
based on an ongoing assessment of trends in interest rates, foreign exchange
rates, and economic developments, giving consideration to possible effects 
on both total return and reported earnings.  The Company's financial 
advisors, both internal and external, provide ongoing advice regarding 
trends that affect management's assessment.


                                    Page 20 of 56<PAGE>
<PAGE>

     INTEREST RATE RISK.  The Company holds long-term debt on a revolving
credit facility with variable interest rates indexed to LIBOR which exposes
it to the risk of increased interest costs if interest rates rise.  To 
reduce the risk related to unfavorable interest rate movements, the Company 
enters into interest rate swap contracts to pay a fixed rate and receive a 
variable rate that is indexed to LIBOR.  The ratio of the swap notional 
amount to the principal amount of variable rate debt issued changes 
periodically based on management's ongoing assessment of the future trend 
in interest rate movements.  The Company's financial advisors, both internal 
and external, provide ongoing advice regarding trends that affect management's
assessment.  The notional amount of fixed interest rate swaps in place at 
January 3, 1998 represents approximately 100 percent of the Company's 
variable rate debt and will change to approximately 50% on February 20, 1998.

     FOREIGN EXCHANGE RATE RISK.  The Securities and Exchange Commission 
has qualified Mexico as a highly inflationary economy under the provisions 
of SFAS No. 52 -  Foreign Currency Translation.  Consequently, in 1997, the 
financial statements of the Mexico operation were remeasured with the U.S. 
dollar as the functional currency.  During 1997, an immaterial loss resulted 
from changes in foreign currency rates between the peso and the U.S. dollar, 
as calculated in the remeasurement process, and was recorded in the Company's 
statement of operations.  Continued increases in the conversion rate for the 
peso will generate further losses in future years.  The Company has pursued 
the purchase of a foreign currency hedge to mitigate the possible financial 
loss resulting from unfavorable movements in the peso; however, due to the 
unstable market conditions relative to the peso, it is management's conclusion
that the cost to acquire a hedge exceeds the financial loss that may occur 
given current predictions by the Company's external financial advisors as 
to the peso conversion rate at fiscal year end 1998.  The conversion rate 
was 8.2 at fiscal year end 1997.  If the conversion rate moves to 10 at year 
end 1998, the loss to the Company would approximate $60,000.  The Company 
will continue to explore options to reduce this financial risk.

Option to Extend License Agreement
----------------------------------

The Company's agreement with Wal-Mart provides for a nine-year base term and 
a three-year option for each vision center, with the base term beginning on 
the date of opening.  The Company opened six vision centers in 1990 under its
agreement with Wal-Mart and 54 such vision centers in 1991, with additional 
vision centers being opened in subsequent years.  Accordingly, beginning in 
1999, the Company will determine whether to exercise options to extend the 
licenses for such vision centers.  The Company will make such decisions based 
upon various factors, including, without limitation, the sales levels of each 
vision center, its estimated future profitability, increased minimum license 
fees charged by Wal-Mart during the option period, and other relevant factors.
Each option must be exercised at least six months prior to the expiration of 
the license for each vision center.  Although the Company expects that it will
extend the licenses of a substantial majority of these vision centers, no 
assurance can be given as to the number of vision centers the licenses of 
which will be extended.


                                    Page 21 of 56<PAGE>
<PAGE>
Risk Factors
------------

     Any expectations, beliefs, and other non-historical statements contained 
in this 10-K are forward looking statements within the meaning of the Private 
Securities Litigation Reform Act of 1995.  Forward-looking statements made in 
this Form 10-K concern the following matters: planned development of software 
systems; planned opening of vision centers; expected exercise of options under 
the Wal-Mart Agreement; potential future acquisitions; funding of expansion 
through internal cash flow; and anticipated reduction of borrowings under the 
Company's credit facility.  With respect to such forward-looking statements 
and others which may be made by, or on behalf of, the Company, the following 
factors could materially affect the Company's actual results:  

- The Company's relationship with its host stores, including the Company's
dependence on Wal-Mart for its current and continued operations.

- Operating factors affecting customer satisfaction and quality controls of 
the Company in optical manufacturing.

- The Company's ability to identify potential acquisition targets and to
consummate acquisitions on acceptable terms and conditions.

- Risks associated with the acquisition and integration of any acquired 
operations.  

- The Company's ability to obtain and retain managed care contracts and
business.  Management expects that managed care arrangements will become 
increasingly important in the optical industry.

- The Company's ongoing ability to generate continued sales and 
contribution improvement at its vision centers operated under the Wal-Mart
Agreement, so as to justify the exercise of options to extend the licenses
of vision centers.

- Pricing and other competitive factors.

- The mix of goods sold.

- Availability of optical and optometric professionals.  An element of the 
Company's business strategy and a requirement of the Wal-Mart Agreement is 
the availability of vision care professionals at clinics in or nearby the 
Company's vision centers.  

- State and federal regulation of managed care and of the practice of 
optometry and opticianry.

- The Company's ability to timely develop a new point of sale system.

- General risks arising from investing and operating in Mexico, including
a different regulatory, political, and governmental environment, currency
fluctuations, high inflation, price controls, restrictions on profit 
repatriation, lower per capita income and spending levels, import duties,
value added taxes, and difficulties in cross-cultural marketing.

- The Company's ability to select in-stock merchandise attractive to 
customers.

- Weather affecting retail operations.



                                    Page 22 of 56<PAGE>
<PAGE>
- Variations in the level of economic activity affecting employment and 
income levels of consumers.

- Seasonality of the Company's business.

Recent Accounting Pronouncements
--------------------------------

     Effective in 1997, the Company adopted Statement of Financial Accounting
Standards No. 128 ("SFAS 128") "Earnings per Share" and No. 129 ("SFAS 129")
"Disclosure of Information and Capital Structure."  SFAS 128 simplifies the 
calculation of basic earnings per common share and diluted earnings per 
common share.  Additionally, disclosure is required presenting a 
reconciliation of the computations for basic and diluted earnings per common
share.  The change in calculations did not change the Company's reported 
earnings per common share amounts presented in previously filed 10-K's or 
quarterly reports filed in 10-Q's.  SFAS 129 requires disclosure of the 
pertinent rights and privileges of all securities other than ordinary 
common stock.  The Company has disclosed such information in previous years'
annual reports filed on Form 10-K.

     Effective in 1997, the Company adopted Statement of Financial Accounting
Standard No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise
and Related Information".  The statement addresses reporting of segment
information.  (See Note 15 of Notes to Consolidated Financial Statements.)

     In July 1997, the Financial Accounting Standards Board issued Statement 
of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income".  The statement addresses the reporting and display of changes in 
equity that result from transactions and other economic events, excluding 
transactions with owners.  Management does not believe the adoption of 
SFAS No. 130 will not have a material impact on the Company's financial
statements.

ITEM  8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Consolidated Financial Statements of the Company are included as a 
separate section of this Report commencing on page 28.

ITEM  9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     There have been no disagreements with accountants on accounting and 
financial disclosure.


                                  PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The section entitled "Election of Directors" contained in the definitive 
proxy statement to holders of the Company's Common Stock in connection with 
the solicitation of proxies to be used in voting at the 1998 Annual Meeting 
of Shareholders is hereby incorporated by reference for the purpose of 
providing information about the identification of directors.

ITEM 11.  EXECUTIVE COMPENSATION

     The section entitled "Compensation of Executive Officers" contained in 
the definitive proxy statement to holders of the Company's Common Stock in 
connection with the solicitation of proxies to be used in voting at the 
1998 Annual Meeting of Shareholders is hereby incorporated by reference 
for the purpose of providing information about executive compensation.

                                    Page 23 of 56<PAGE>
<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The section entitled "Common Stock Ownership of Certain Beneficial 
Owners and Management" contained in the definitive proxy statement to 
holders of the Company's Common Stock in connection with the solicitation 
of proxies to be used in voting at the 1998 Annual Meeting of Shareholders 
is hereby incorporated by reference for the purpose of providing information 
about security ownership of certain beneficial owners and management.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The section entitled "Compensation Committee Interlocks and Insider 
Participation" contained in the definitive proxy statement to holders of 
the Company's Common Stock in connection with the solicitation of proxies 
to be used in voting at the 1998 Annual Meeting of Shareholders is hereby 
incorporated by reference for the purpose of providing information about 
transactions with management and others and certain business relationships.

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a) (1) and (2)  The Consolidated Financial Statements and Schedule of 
the Company and its subsidiaries are filed herewith as a separate section 
of this Report commencing on page 28.

     (3)  The following exhibits are filed herewith or incorporated by 
reference:

Exhibit
Number 

 3.2a      --        Amended and Restated By-Laws of the Company. 

 4.1b      --        Form of Common Stock Certificate.

 4.2c      --        Amended and Restated Articles of Incorporation of the
                     Company.

 4.5b      --        Rights Agreement dated as of January 17, 1997 between 
                     the Company and Wachovia Bank of North Carolina, N.A.

10.7a      --        Sublease Agreement, dated December 16, 1991, by and 
                     between Wal-Mart Stores, Inc. and the Company. 

10.17d     --        Form indemnification agreement for directors and 
                     certain executive officers of the Company. 

10.24e++   --        Employment Agreement of Sandra M. Buffa, dated as of 
                     June 15, 1993.

10.34f     --        Vision Center Master License Agreement, dated as of 
                     June 16, 1994, by and between Wal-Mart Stores, Inc. and 
                     the Company.  [Portions of Exhibit 10.34 have been 
                     omitted pursuant to an order for confidential treatment 
                     granted by the Commission.  The omitted portions have 
                     been filed separately with the Commission.]



                                    Page 24 of 56<PAGE>
<PAGE>
Exhibit
Number 

10.37g++   --        Split Dollar Life Insurance Agreement, dated as of 
                     November 3, 1994, among the Company, A. Kimbrough Davis, 
                     as Trustee, and James W. Krause.

10.39g++   --        Level IV Management Incentive Plan.

10.46h     --        Agreement dated as of November 23, 1995 by and between 
                     Mexican Vision Associates Operadora, S. de R.L. de C.V. 
                     and Wal-Mart de Mexico, S.A. de C.V. in original Spanish
                     and an uncertified English translation.  [Portions of 
                     Exhibit 10.46 have been omitted pursuant to a request 
                     for confidential treatment filed with the Commission.  
                     The omitted portions have been filed separately with 
                     the Commission.]

10.47i++   --        Executive Relocation Policy.

10.48j++   --        Restated Stock Option and Incentive Award Plan.

10.48.1k++ --        First Amendment to Restated Stock Option and Incentive 
                     Award Plan.

10.49l++   --        Form Change in Control Agreement for certain executive 
                     officers of the Company.

10.50l     --        Agreement for Assignment of License Interests and Related
                     Matters dated as of November 1, 1996 by and among the 
                     Company and other parties.

10.51k++   --        Form Restricted Stock Award.

10.52m++   --        Restated Non-Employee Director Stock Option Plan.

10.53n     --        $45,000,000 Credit Agreement dated as of July 15, 1997 
                     among the Company, Wachovia Bank, N.A., and certain 
                     other banks.

10.54**    --        Stock Purchase Agreement dated as of September 15, 1997 
                     by and between the Company and Myrel Neumann, O.D.

10.55++**  --        Executive Deferred Compensation Plan.

11**       --        Statement Re: Computation of Net Income (Loss) Per Share.

21**       --        Subsidiaries of the Registrant.

23**       --        Consent by Arthur Andersen LLP.

27**       --        Financial Data Schedule.



                                    Page 25 of 56<PAGE>
<PAGE>
Exhibit
Number 

a         Incorporated by reference to the Company's Registration Statement 
          on Form S-1, registration number 33-46645, filed with the Commission
          on March 25, 1992, and amendments thereto.

b        Incorporated by reference to the Company's Registration Statement
         on Form 8-A filed with the Commission on January 17, 1997.

c        Incorporated by reference to the Company's Form 8-K filed with the 
         Commission on January 17, 1997.

d        Incorporated by reference to the Company's Form 10-K for the fiscal 
         year ended December 31, 1992.

e        Incorporated by reference to the Company's Form 10-Q for the 
         quarterly period ended September 30, 1993.

f        Incorporated by reference to the Company's Form 10-Q for the 
         quarterly period ended September 30, 1994.

g        Incorporated by reference to the Company's Form 10-K for the 
         fiscal year ended December 31, 1994.

h        Incorporated by reference to the Company's Form 10-K for the 
         fiscal year ended December 30, 1995.

i        Incorporated by reference to the Company's Form 10-Q for the
         quarterly period ended March 30, 1996.

j        Incorporated by reference to the Company's Form 10-Q for the
         quarterly period ended June 29, 1996.

k        Incorporated by reference to the Company's Form 10-Q for the 
         quarterly period ended March 29, 1997.

l        Incorporated by reference to the Company's Form 10-K for the 
         year ended December 28, 1996.

m        Incorporated by reference to the Company's Form 10-Q filed on 
         June 28, 1997.

n        Incorporated by reference to the Company's Form 10-Q for the 
         quarterly period ended September 27, 1997.

**       Filed with this Form 10-K.

++       Management contract or compensatory plan or arrangement in which 
         a director or named executive officer participates.


         (b)  No reports on Form 8-K have been filed during October, 
              November, or December, 1997.


                                    Page 26 of 56<PAGE>
<PAGE>
                                SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities 
Exchange Act of 1934, the registrant has duly caused this report to be 
signed on its behalf by the undersigned, thereunto duly authorized.

                                      NATIONAL VISION ASSOCIATES, LTD.


                                      By:      /s/James W. Krause
                                               James W. Krause
                                               Chairman of the Board, 
                                               President and Chief Executive 
                                               Officer and Director
Date: February 17, 1998

     Pursuant to the requirements of the Securities Exchange Act of 1934, 
this report has been signed below by the following persons on behalf of the 
registrant on February 17, 1998, in the capacities indicated.

    Signature                                      Title

    /s/
_____________________________                                                  
    James W. Krause                   Chairman of the Board, President
                                      and Chief Executive Officer and Director

    /s/
_____________________________
    Sandra M. Buffa                   Senior Vice President, Finance and 
                                      Treasurer, and Director (Principal 
                                      Financial Officer)
  
    /s/
_____________________________
    Angus C. Morrison                 Vice President, Corporate Controller 
                                      (Principal Accounting Officer)

    /s/
_____________________________
    David I. Fuente                   Director

    /s/
_____________________________
    Ronald J. Green                   Director

    /s/
_____________________________
    Campbell B. Lanier, III           Director

    /s/
_____________________________
    J. Smith Lanier, II               Director


                                    Page 27 of 56<PAGE>
<PAGE>




                 NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES


                  CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
         AS OF DECEMBER 30, 1995, DECEMBER 28, 1996, AND JANUARY 3, 1998
                                   TOGETHER WITH
                                  AUDITORS' REPORT























                                    Page 28 of 56<PAGE>
<PAGE>

                  NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES
               INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE

     The following consolidated financial statements and schedule of the 
registrant and its subsidiaries are submitted herewith in response to 
Item 8 and Item 14(a)1 and to Item 14(a)2, respectively.

                                                                         Page
                                                                         ____

Report of Independent Public Accountants                                  30

Consolidated Balance Sheets as of December 28, 1996 and
  January 3, 1998                                                         31 

Consolidated Statements of Operations for the 
  Years Ended December 30, 1995, December 28, 1996 and
  January 3, 1998                                                         32 

Consolidated Statements of Shareholders' Equity for 
  the Years Ended December 30, 1995, December 28, 1996 and
  January 3, 1998                                                         33 

Consolidated Statements of Cash Flows for the Years Ended 
  December 30, 1995, December 28, 1996 and January 3, 1998                34 

Notes to Consolidated Financial Statements and Schedule                   35 

Schedule II, Valuation and Qualifying Accounts                            56 



     All other schedules for which provision is made in the applicable 
accounting regulations of the Securities and Exchange Commission are not 
required under the related instructions, are inapplicable, or have been 
disclosed in the notes to consolidated financial statements and, 
therefore, have been omitted.


                                    Page 29 of 56<PAGE>
<PAGE>

                      REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Shareholders of National Vision
Associates, Ltd. and Subsidiaries:


     We have audited the accompanying consolidated balance sheets of 
NATIONAL VISION ASSOCIATES, LTD. (a Georgia corporation) AND SUBSIDIARIES 
as of December 28, 1996 and January 3, 1998 and the related consolidated 
statements of operations, shareholders' equity, and cash flows for the 
three years in the period ended January 3, 1998.  These financial statements 
and the schedule referred to below are the responsibility of the Company's 
management.  Our responsibility is to express an opinion on these financial 
statements and schedule based on our audits.

     We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the 
overall financial statement presentation.  We believe that our audits 
provide a reasonable basis for our opinion. 

     In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of National 
Vision Associates, Ltd. and subsidiaries as of December 28, 1996 and 
January 3, 1998 and the results of their operations and their cash 
flows for the three years in the period ended January 3, 1998 in 
conformity with generally accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the 
basic financial statements taken as a whole.  The schedule listed in the 
index to consolidated financial statements is presented for purposes of 
complying with the Securities and Exchange Commission's rules and is 
not part of the basic financial statements.  This schedule has been 
subjected to the auditing procedures applied in the audit of the basic 
financial statements and, in our opinion, fairly states in all material 
respects the financial data required to be set forth therein in relation 
to the basic financial statements taken as a whole.



                                         ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 17, 1998


                                    Page 30 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES

                            CONSOLIDATED BALANCE SHEETS
                       December 28, 1996 and January 3, 1998
                          (000's except share information)
                                                                                                           1996           1997 
                                                                                                           ____           ____
                                        ASSETS
<S>                                                                                                     <C>            <C>
CURRENT ASSETS:
 Cash and cash equivalents                                                                               $ 1,110        $ 2,559
 Accounts receivable (net of allowance: 1996 - $353; 1997 - $762)                                          4,164          6,066
 Inventories                                                                                              23,970         23,271
 Store preopening costs (net of accumulated amortization: 1996 - $605; 1997 - $712)                          240            295
 Other current assets                                                                                        944            464
                                                                                                         -------        -------
    Total current assets                                                                                  30,428         32,655
                                                                                                         -------        -------
PROPERTY AND EQUIPMENT:
 Equipment                                                                                                38,573         44,070
 Furniture and fixtures                                                                                   17,136         20,366
 Leasehold improvements                                                                                   13,178         15,005
 Construction in progress                                                                                  1,669            893
                                                                                                         -------        -------
                                                                                                          70,556         80,334
 Less accumulated depreciation                                                                           (27,206)       (36,692)
                                                                                                         -------        -------
 Net property and equipment                                                                               43,350         43,642
                                                                                                         -------        -------
OTHER ASSETS AND DEFERRED COSTS (net of accumulated amortization: 
  1996 - $729; 1997 - $846)                                                                                  786          1,015

ASSIGNMENT AGREEMENT AND INTANGIBLE ASSETS (net of accumulated
  amortization:  1997 - $733)                                                                                             5,938
                                                                                                         -------        -------
                                                                                                         $74,564        $83,250
                                                                                                         =======        =======

                              LIABILITIES AND SHAREHOLDERS' EQUITY 
CURRENT LIABILITIES:
 Accounts payable                                                                                        $ 8,283        $ 7,252
 Accrued expenses and other current liabilities                                                            8,643         12,754
 Current portion long-term debt                                                                                             478
                                                                                                         -------        -------
     Total current liabilities                                                                            16,926         20,484
                                                                                                         -------        -------
REVOLVING CREDIT FACILITY - LONG TERM                                                                     26,500         19,500
                                                                                                                               
LONG-TERM NOTES PAYABLE, LESS CURRENT PORTION                                                                             4,225

DEFERRED INCOME TAX LIABILITIES                                                                            1,232          2,673
                                                                                                                               
<PAGE>
COMMITMENTS AND CONTINGENCIES (Note 8)
SHAREHOLDERS' EQUITY:
 Preferred stock, $1 par value; 5,000,000 shares authorized, none issued                                      --             -- 
 Common stock, $.01 par value; 100,000,000 shares authorized,  
   20,644,752 and 20,819,955 shares issued and outstanding as 
   of December 28, 1996 and January 3, 1998, respectively                                                    206            208
 Additional paid-in capital                                                                               42,166         43,053
 Retained deficit                                                                                         (8,393)        (2,820)
 Cumulative foreign currency translation                                                                  (4,073)        (4,073)
                                                                                                         -------        -------
     Total shareholders' equity                                                                           29,906         36,368
                                                                                                         -------        -------
                                                                                                         $74,564        $83,250
                                                                                                         =======        =======

</TABLE>

    The accompanying notes are an integral part of these consolidated 
    financial statements.

                                    Page 31 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                          NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES

                                CONSOLIDATED STATEMENTS OF OPERATIONS
             For the Years Ended December 30, 1995, December 28, 1996 and January 3, 1998  
                                 (000's except per share information)

                                                                              1995              1996              1997
                                                                              ----               ----             ----
<S>                                                                        <C>                <C>               <C>
NET SALES                                                                  $145,573          $160,376           $186,354
COST OF GOODS SOLD                                                           67,966            76,692             86,363
                                                                           --------          --------           --------
GROSS PROFIT                                                                 77,607            83,684             99,991
SELLING, GENERAL, AND
  ADMINISTRATIVE EXPENSES                                                    74,390            76,920             89,156
PROVISION FOR DISPOSITION OF 
  ASSETS                                                                        958                   
OTHER NONRECURRING CHARGES                                                    1,053                   
                                                                           --------           --------          --------
OPERATING INCOME                                                              1,206             6,764             10,835
                                                                           --------           --------          --------
OTHER EXPENSE, NET                                                            2,626             2,084              1,554 
                                                                           --------           --------          --------
INCOME (LOSS) BEFORE INCOME TAXES                                            (1,420)            4,680              9,281
PROVISION FOR INCOME TAXES                                                      100             1,200              3,708 
                                                                           --------           --------          --------
NET INCOME (LOSS)                                                          $ (1,520)         $  3,480           $  5,573
                                                                           ========           ========          ========

BASIC EARNINGS (LOSS) PER COMMON SHARE                                     $   (.07)         $    .17           $    .27
                                                                           ========           ========          ========
DILUTED EARNINGS (LOSS) PER COMMON SHARE                                   $   (.07)         $    .17           $    .27
                                                                           ========           ========          ========

</TABLE>

    The accompanying notes are an integral part of these consolidated 
    financial statements.


                                    Page 32 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                       NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
         For the Years Ended December 30, 1995, December 28, 1996, and January 3, 1998
                                   (000's except share information)                        

                                                                       Additional       Retained        Cumulative
                                                    Common Stock         Paid-In        Earnings        Translation
                                                Shares        Amount     Capital        (Deficit)       Adjustments        Total
                                                ------        ------   ----------       ---------       -----------        -----

<S>                                           <C>               <C>      <C>            <C>                <C>           <C>
BALANCE, December 31, 1994                    20,510,402        $205     $42,133        $(10,353)          $(2,372)      $29,613
Exercise of stock options                         76,103           1          14                                              15
Foreign Currency Translation                                                                                (1,782)       (1,782)
Net Loss                                                                                  (1,520)                         (1,520)
                                              ----------        ----     -------        --------           -------       -------
BALANCE, December 30, 1995                    20,586,505         206      42,147         (11,873)           (4,154)       26,326
Exercise of stock options                         58,247                      19                                              19
Foreign Currency Translation                                                                                    81            81
Net Income                                                                                 3,480                           3,480
                                              ----------        ----     -------        --------           -------       -------
BALANCE, December 28, 1996                    20,644,752         206      42,166          (8,393)           (4,073)       29,906
Issuance of common stock                         110,795           1         835                                             836
Restricted Stock                                  54,000           1          35                                              36
Exercise of stock options                         10,408                      17                                              17
Net Income                                                                                 5,573                           5,573
                                              ----------        ----     -------        --------           -------       -------
BALANCE, January 3, 1998                      20,819,955        $208     $43,053        $ (2,820)          $(4,073)      $36,368
                                              ==========        ====     =======        ========           =======       =======
</TABLE>




     The accompanying notes are an integral part of these consolidated 
     financial statements.


                                    Page 33 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                       NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
           For the Years Ended December 30, 1995, December 28, 1996 and January 3, 1998
                                               (000's)
                                                                               1995               1996               1997
                                                                               ----               ----               ----
<S>                                                                          <C>                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                                            $ (1,520)          $  3,480          $  5,573
                                                                             --------            -------           -------
Adjustments to reconcile net income (loss) to 
  net cash provided by (used in) operating activities:     
    Provision for disposition of assets                                           958                                  
    Provision for other nonrecurring charges                                    1,053                                     
    Depreciation and amortization                                              10,378             10,058            11,035
    Provision for Deferred Income Tax Expense                                                      1,002             1,441 
    Other                                                                          29                 91               268
    Changes in operating assets and liabilities, 
    net of effects of acquisitions:
      Receivables                                                                (701)             2,224              (875)
      Inventories                                                              (2,467)            (2,594)            2,031 
      Store preopening costs                                                   (1,288)              (657)             (643) 
      Other current assets                                                        (34)                67               612 
      Accounts payable, accrued expenses, and other 
       current liabilities                                                        (88)               725             1,245 
                                                                             --------            -------           -------
         Total adjustments                                                      7,840             10,916            15,114 
                                                                             --------            -------           -------
         Net cash provided by operating activities                              6,320             14,396            20,687 
                                                                             --------            -------           -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment                                            (13,175)            (2,713)           (8,049) 
Acquisition, net of cash acquired                                                                                   (1,772)
Payment for non-competition agreement                                                                                 (484) 
Purchase of Assignment Agreement                                                                                      (500)
                                                                             --------            -------           -------
         Net cash used in investing activities                                (13,175)            (2,713)          (10,805) 
                                                                             --------           --------           -------
CASH FLOWS FROM FINANCING ACTIVITIES:  
Advances on revolving credit facility                                          12,000              1,500             5,500  
Repayments on revolving credit facility                                        (4,000)           (13,000)          (12,500)
Repayments of notes payable and capital leases                                   (471)              (480)           (1,450)
Proceeds from issuance of common stock                                             15                 19                17 
                                                                             --------           --------           -------
         Net cash provided by (used in) financing activities                    7,544            (11,961)           (8,433) 
                                                                             --------           --------           -------
Effect of foreign currency exchange rate changes                               (1,782)                81                   
                                                                             --------           --------           -------
NET INCREASE (DECREASE) IN CASH                                                (1,093)              (197)            1,449  
CASH, beginning of year                                                         2,400              1,307             1,110 
                                                                             --------           --------           -------
CASH, end of year                                                            $  1,307           $  1,110           $ 2,559 
                                                                             ========           ========           =======
</TABLE>
    The accompanying notes are an integral part of these consolidated 
    financial statements.
                                    Page 34 of 56<PAGE>
<PAGE>
               NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
            December 30, 1995, December 28, 1996 and January 3, 1998  

1.  ORGANIZATION AND OPERATIONS

     National Vision Associates, Ltd. (the "Company") is engaged in the 
retail sale of optical goods and services, primarily in the United States 
and Mexico.  The Company is largely dependent on Wal-Mart Stores, Inc. 
("Wal-Mart") for continued operation of current vision centers (see Note 3).
In October 1997, the Company acquired all the capital stock of Midwest 
Vision, Inc., a retail optical company with 51 locations in Minnesota and 
three adjoining states (see Note 4).

2.  SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

     The consolidated financial statements include the accounts of the 
Company and its subsidiaries.  All significant intercompany balances and 
transactions have been eliminated in consolidation.  Effective 
January 1, 1995, the Company changed its year end to a 52/53 week retail 
calendar with the fiscal year ending on the Saturday closest to December 31. 
Pursuant to such calendar, financial information for each of 1995 and 1996 
is presented for the 52-week period ended December 30 and December 28,
respectively.  Fiscal 1997 consisted of 53 weeks ended January 3, 1998.  
Due to various statutory and other considerations, international operations 
were not changed to this 52/53 week calendar.  To allow for more timely 
consolidation and reporting, international operations are reported using a 
fiscal year ending November 30. Certain amounts in the December 28, 1996 
and December 30, 1995 consolidated financial statements have been 
reclassified to conform to the January 3, 1998 presentation.

Revenue Recognition

     The Company recognizes revenues and the related costs from retail 
sales when at least 50% of the payment has been received.

Cash and Cash Equivalents

     The Company considers cash on hand, short-term cash investments, and 
checks that have not been processed by financial institutions to be cash 
and cash equivalents.  The aggregate amount of outstanding checks not 
processed at January 3, 1998 was $381,000 (at December 28, 1996 - $440,000).
The Company's policy is to maintain uninvested cash at minimal levels.  Cash 
includes cash equivalents which represent highly liquid investments with a 
maturity of one month or less.  The carrying amount approximates fair value.  
The Company restricts investment of temporary cash investments to financial 
institutions with high credit standing.  


                                    Page 35 of 56<PAGE>
<PAGE>
Inventories

     Inventories are valued at the lower of weighted average cost or 
market.  Market represents the net realizable value.

Store Preopening Costs

     Prior to 1998, preopening costs which were directly associated with 
the opening of new vision centers have been capitalized and amortized using 
the straight-line method over 12 months beginning with the commencement of 
each vision center's operations.  The average cost capitalized per vision 
center approximated $20,000.  Effective in 1998, preopening costs will be 
expensed as incurred in accordance with proposed AICPA Statement of Position,
"Reporting on the Costs of Start-Up Activities".

Property and Equipment

     Property and equipment are stated at cost.  For financial reporting 
purposes, depreciation is computed using the straight-line method over 
the assets' estimated useful lives or terms of the related leases, 
whichever is shorter.  Accelerated depreciation methods are used for 
income tax reporting purposes.  For financial reporting purposes, the 
useful lives used for computation of depreciation range from five to ten 
years for equipment, from three to nine years for furniture and fixtures,
from three to six years for hardware and software related to information 
systems processing, and nine years for leasehold improvements.  At the 
time property and equipment are retired, the cost and related accumulated 
depreciation are removed from the accounts and any gain or loss is credited 
or charged to income.  Annually, the Company evaluates the net book value 
of property and equipment for impairment.  The evaluation is performed 
for retail locations and compares its best estimate of future cash flows 
with the net book value of the property and equipment.  Maintenance and 
repairs are charged to expense as incurred.  Replacements and improvements 
are capitalized.  

Balance Sheet Financial Instruments:  Fair Values

     The carrying amount reported in the consolidated balance sheets for 
cash, accounts receivable, accounts payable and short-term debt approximates 
fair value because of the immediate or short-term maturity of these financial 
instruments.  The carrying amount reported for "Revolving Credit Facility-
Long-Term" approximates fair value because the underlying instrument is a 
variable rate note that reprices frequently.  The fair value of the 
Company's fixed interest rate swap agreements and fixed rate debt is based 
on estimates using standard pricing models that take into consideration 
current interest rate market conditions supplied by independent financial 
institutions.

     Financial instruments which potentially subject the Company to 
concentrations of credit risk consist principally of trade accounts 
receivable.  The risk is limited due to the large number of individuals 
and entities comprising the Company's customer base. 

Assignment Agreement and Intangible Assets

     Assignment agreement and intangible assets represent the excess of the 
cost of net assets acquired in certain contract transactions and business 
combinations over their fair value.  Such amounts are amortized over periods
ranging from 11 years to 15 years.  The Company evaluates intangible assets
for impairment annually.  In completing this evaluation, the Company compares 
its best estimate of future cash flows with the carrying value of the 
underlying asset.

                                    Page 36 of 56<PAGE>
<PAGE>
Income Taxes

     Deferred income taxes are recorded using current enacted tax laws 
and rates.  Deferred income taxes are provided for depreciation, store 
preopening costs, organization costs, inventory basis differences, and 
accrued expenses where there is a temporary difference in recording such 
items for financial reporting and income tax reporting purposes.

Other Deferred Costs

     Deferred costs represent capitalized assets resulting from contractual 
obligations and are being amortized on a straight line basis over a period 
of time not to exceed five years.

Advertising and Promotion Expense

     Production costs of future media advertising and related promotion 
campaigns are deferred until the advertising events occur.  All other 
advertising and promotion costs are expensed when incurred.

Other Income and Expense

     Other income and expense represents net financing costs associated 
with the Company's financing activities, including interest costs on 
borrowings under the revolving credit facility and other notes payable, 
loan commitment fees and amortization of interest rate hedge and swap 
agreements, purchase discounts on invoice payments, interest income on 
cash investments and for fiscal 1997, realized exchange gains or losses 
resulting from foreign currency transactions.

Foreign Currency Translation

     The financial statements of foreign subsidiaries are translated 
into U.S. dollars in accordance with Statement of Financial Accounting 
Standards No. 52 ("SFAS No. 52").  Translation adjustments, which result 
from the process of translating foreign financial statements into U.S. 
dollars, are accumulated as a separate component of shareholders' equity. 

     The Securities and Exchange Commission has classified Mexico as a highly 
inflationary economy under the provisions of SFAS No. 52 for reporting periods
starting in 1997.  Effective in 1997, the financial statements of the Company's
Mexico operations are remeasured with the U.S. dollar as the functional 
currency.  Any gain or loss is recorded in the Company's statement of 
operations as other income and expense.  

Use of Estimates

     The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the reported amounts of assets and liabilities 
and disclosure of contingent assets and liabilities at the date of the 
financial statements and the reported amounts of revenues and expenses 
during the reporting period.  Actual results could differ from those 
estimates.
                                    Page 37 of 56<PAGE>
<PAGE>
Derivatives Used in Risk Management Activities

     As part of its risk management activities, the Company uses interest 
rate swaps to modify the variable interest rate characteristics of long-term 
debt on the revolving credit facility.  The Company holds no other 
derivatives or similar instruments.  The derivative contracts are designated
as hedges when acquired.  They are expected to be effective economic hedges
and have high correlation with the debt being hedged.

     Interest rate swaps are accounted for using the accrual method, with 
an adjustment to interest expense in the income statement.  The Company 
accounts for the swap by recording the offset of the swap into the Company's
accounts.  The swaps are settled every 90 days.  Realized gains and losses 
from the early settlement or disposition of swap contracts are deferred on 
the balance sheet and amortized to interest expense over the original term 
of the swap agreement.

3.  WAL-MART MASTER LICENSE AGREEMENT AND OTHER AGREEMENTS

     Wal-Mart Agreement

     In 1994, the Company and Wal-Mart replaced their original agreement with 
a new master license agreement (the "Wal-Mart Agreement"), which increased 
minimum and percentage license fees payable by the Company and also granted 
the Company the opportunity to operate up to 400 vision centers in existing 
and future Wal-Mart stores (357 vision centers were in operation at fiscal 
year end 1997).  In January 1995, the Company made a lump sum payment in 
exchange for such opportunity.  The payment is being amortized over the 
initial term of the vision centers opened subsequent to January 1, 1995.  In 
1997, the Wal-Mart Agreement was amended to provide that Wal-Mart must, by 
April 1, 2000, grant the Company the opportunity to operate 400 vision centers 
under the Wal-Mart Agreement, and that, with one exception, all new vision 
centers opened after 1997 will be located in California and North Carolina.  
Each vision center covered by the Wal-Mart Agreement has a separate license.  
Pursuant to the Wal-Mart Agreement, the term of each such license is nine 
years with a renewable option for one additional three-year term.  Percentage
license fees remain the same over the nine-year base term and three-year
option term, whereas minimum license fees increase during the three-year
option term.

     Consulting and Management Agreement 

     Among other things, the Wal-Mart Agreement requires an independent, 
licensed optometrist to practice adjacent to or near each of the Company's 
vision centers for at least 48 hours per week.  In 1990, the Company entered 
into a long-term consulting and management service agreement, as amended, 
with two companies (Eyecare Leasing, Inc. ("ELI") and Stewart-Phillips, Inc. 
("SPI")) jointly owned by two shareholders to recruit such optometrists for 
certain of its vision centers.  Subject to applicable state regulations, 
this agreement, among other things, required the Company to provide space 
and certain equipment to the optometrists for which the optometrists pay 
the Company an occupancy fee.  In exchange for their services, ELI and SPI 
received certain fees under the agreement.  Net of the fees paid to ELI and
SPI, the Company received $2.5 million and $2.9 million pursuant to this 
agreement during 1995 and 1996, respectively.  The net payments offset 
occupancy expense incurred by the Company.  Occupancy expense is a 
component of cost of goods sold.

                                    Page 38 of 56<PAGE>
<PAGE>
     In January 1997, the Company completed various transactions related to 
its relationship with each of ELI and SPI.  The transactions involved the 
termination of such consulting agreement and transfer of the responsibilities
of ELI and SPI to a subsidiary of the Company.  As a result of these 
transactions, the Company acquired the right to the payments which otherwise 
would have been made to ELI and SPI under the consulting agreement.  In 1997, 
the Company received occupancy fees of $4.0 million, which included $1.4 
million which would have been paid to ELI and SPI if the consulting agreement
had been in effect during 1997.  The aggregate cost of the transactions was 
$4.6 million, which was capitalized as an intangible asset and is being 
amortized over the remaining life of the original term of vision center 
leases.  The Company made a lump sum payment of $500,000 at closing and 
entered into promissory obligations for the balance, payable over a 12-year 
period at 6.4% interest.

     Mexico Agreement

     In 1994, the Company opened 8 vision centers in stores owned and 
operated by Wal-Mart de Mexico, S.A. de C.V. ("Wal-Mart de Mexico").  In 
1995, the Company completed the negotiation of a master license agreement 
governing these vision centers.  Pursuant to this agreement, each vision 
center has an individual base term of five years from the date of opening, 
followed by two options (each for two years), and one option for one year.  
Each party has the right to terminate a location which fails to meet specified
sales levels.  The agreement provides for annual fees based on a minimum 
and percentage of sales.  The agreement also gives the Company a right 
of first refusal to open vision centers in all stores in Mexico owned 
by Wal-Mart de Mexico.  As of January 3, 1998, the Company operated 
26 vision centers in Wal-Mart de Mexico stores.

4.   ACQUISITION

     In October 1997, the Company acquired the common stock of Midwest 
Vision, Inc., a retail optical company which operated 51 vision centers in 
Minnesota, Wisconsin, Iowa, and North Dakota.  Unaudited annual sales for 
Midwest Vision approximated $14.4 million for the calendar year 1997.  The 
purchase price was approximately $3.6 million, plus $1.4 million of assumed 
long-term debt.

     The acquisition was accounted for by the purchase method of accounting
and, accordingly, the purchase price was allocated to the assets acquired and
the liabilities assumed based on the estimated fair values at the date of 
acquisition.  The excess of purchase price over the estimated fair values of 
the net assets acquired was recorded as an intangible asset (goodwill), which 
is being amortized on a straight-line basis over 15 years for financial 
reporting.  Subsequent to the close date, the Company paid off the outstanding 
long-term debt of Midwest Vision.  

     The estimated fair values of assets and liabilities acquired are 
summarized as follows:

           Cash                                         $  327
           Inventory                                     1,332
           Accounts receivable and other assets          1,398
           Property and equipment                        1,729
           Excess of cost over net assets acquired       2,068
           Accounts payable and accrued expenses        (1,867)
           Debt                                         (1,433)
                                                        ------
                Net Purchase Price                      $3,554
                                                        ======

                                   Page 39 of 56<PAGE>
<PAGE>
     The purchase price was paid in cash of $1.9 million, a debt instrument 
(in the principal amount of $620,000 payable over five years), and 110,795 
shares of the Company's common stock.  Additionally, the Company made cash 
payments of $239,000 related to investment advisory fees and other costs 
directly associated with the acquisition.  In connection with 100,000 shares 
of the common stock, the Company also issued a put option to the seller, 
entitling the seller to put such shares to the Company at $7.00 per share in 
January 1999 or, if such shares are not then put back to the Company, at $9.00
per share in January 2000.  If the seller exercises the put option, the Company
will settle the transaction by issuing additional shares to the seller such 
that the aggregate fair market value of the shares equals the aggregate 
guarantee value.  The guarantee has been recorded at a fair market value.  In 
conjunction with the transaction, the Company entered into an employment 
agreement with the seller which requires the performance of certain duties 
and contains certain noncompete provisions.  

     The operating results of Midwest Vision are included in the Company's 
consolidated results of operations from the date of acquisition.

5.   INVENTORY

The Company classifies inventory as finished goods if such inventory is readily
available for sale to customers without any assembly or value added processing
to satisfy a customer's order.  Finished goods include contact lens, over the 
counter sunglasses and accessories.  The Company classifies inventory as raw 
material if such inventory requires assembly or value added processing to 
satisfy a customer's order.  This would include grinding a lens blank, 
"cutting" the lens in accordance with a prescription from an optometrist, and 
fitting the lens in a frame.  Frames and uncut lens are considered raw 
material.  A majority of the Company's sales represent custom orders; 
consequently, the majority of the Company's inventory is classified as raw 
material.

Inventory balances, by classification, may be summarized as follows:

                                                  1996          1997
                                                  ----          ----
Raw Material                                    $15,199       $15,646
Finished Goods                                    8,279         7,003
Supplies                                            492           622
                                                -------       -------
                                                $23,970       $23,271
                                                =======       =======

6.   LONG-TERM DEBT 

     Long-term debt obligations at December 28, 1996 and January 3, 1998 
consisted of the following (in 000's):

<TABLE>
<CAPTION>
                                                                          1996            1997
                                                                          ----            ----
     <S>                                                                  <C>             <C>
     Borrowings under revolving credit facility                           $26,500         $19,500
     Other promissory notes                                                                 4,703
                                                                          -------         -------
                                                                           26,500          24,203 
     Less current portion                                                                     478
                                                                          -------         -------
                                                                          $26,500         $23,725
                                                                          =======         =======
</TABLE>

                                    Page 40 of 56<PAGE>
<PAGE>

     In July 1997, the Company entered into a syndicated $45 million 
two-year unsecured revolving credit facility.  The aggregate outstanding 
balance is due for repayment in July 1999.  The Company's credit facility 
contains, among other covenants, a material adverse change clause and 
certain minimum net worth and other requirements.  Commitment fees 
payable on the average daily balance of the unused portion of the credit 
facility were .25% per annum in 1997.  The Company paid approximately 
$150,704 and $125,611 in various fees related to the revolving credit 
facility in 1996 and 1997, respectively.  Interest on the outstanding 
advances is based on certain financial covenants and applicable interest 
rates for Eurodollar or base loan borrowings, as defined in the agreement.  

     As of January 3, 1998, the Company had borrowed $19.5 million under 
its credit facility at a weighted average interest rate of 6.9%.  The 
aggregate fair value of the Company's long-term debt obligation under 
the credit facility is estimated to approximate its carrying value.

     The Company has entered into rate swap agreements which effectively 
convert underlying variable rate debt based on Eurodollar rates to fixed rate 
debt.  The agreements extend through February 20, 2000.  The notional principal
amount on one agreement is $20 million, with an effective fixed rate of 6.93%,
which will expire on February 20, 1998.  At that date, two separate agreements
will commence with an aggregate notional principal amount of $10 million and 
an effective fixed rate which averages 7.52%.  The fair market value of the 
fixed rate hedges approximates book value.  Under existing accounting 
standards, this activity is accounted for as a hedging activity.  The swaps 
are settled every 90 days.

     The Company entered into unsecured promissory notes relative to various 
transactions completed with ELI and SPI (see Note 3) and the Midwest Vision
acquisition (see Note 4).  The notes are fixed rate instruments, with rates 
ranging from 6.4% to 8.5%.  The promissory notes with ELI and SPI require 
quarterly payments through January 2009 whereas the Midwest Vision note 
requires monthly payments through October 2002.  Based on current market 
rates at January 3, 1998, the fair market value of the promissory notes is 
approximately $80,000 less than book value.  At January 3, 1998, future
minimum principal payments on the promissory notes were as follows (amounts
in 000's):

                       1998              $  478
                       1999                 487
                       2000                 498
                       2001                 509
                       2002                 495
                       Thereafter         2,236
                                         ------
                                         $4,703

     The Company maintains an unsecured line of credit agreement with a 
financial institution which, at the discretion of the lender, allows the 
Company to borrow up to $5 million.  The agreement is available to fund
financing needs on a short-term basis at a variable interest rate, determined 
by the lender.  As of year-end, there were no borrowings outstanding under 
the agreement.

7.   RELATED-PARTY TRANSACTIONS

     In 1991, a receivable from the Company was assigned to a lease finance 
company which is owned by a shareholder/director of the Company.  The Company 
made lease payments (including principal and interest) of $417,000 and $341,000 
to this lease finance company in 1995 and 1996, respectively.  Such lease was 
paid in full as of September, 1996.

                                    Page 41 of 56<PAGE>
<PAGE>

     During 1995, 1996, and 1997, the Company purchased its business and 
casualty insurance policies through an insurance agency in which a 
shareholder/director has a substantial ownership interest.  Total 
premiums paid for policies acquired through the insurance company during 
1995, 1996, and 1997 were approximately $910,000, $844,000, and $904,732,
respectively.  The Audit Committee of the Company's Board 
of Directors has approved such purchases.

     In 1996, Edward G. Weiner, the Company's then Vice Chairman, was employed
at an annual salary of $165,000 pursuant to an employment agreement with the 
Company with a term ending March 1, 2000.  In connection with Mr. Weiner's
resignation from the Board of Directors in February 1997, the employment 
agreement was terminated, and the Company (in exchange for a non-competition 
agreement through March, 2000) paid Mr. Weiner an amount equal to a discounted
present value of the payments which would have been made under the employment
agreement.  The payment amount was capitalized as other deferred costs and 
will be amortized over the term of the non-compete agreement.

8.   COMMITMENTS AND CONTINGENCIES

     Noncancelable Operating Lease and License Agreements

     As of January 3, 1998, the Company is a lessee under noncancelable 
operating lease agreements for certain equipment which expire at various 
dates through 1998.  Additionally, the Company is required to pay minimum 
and percentage license fees pursuant to certain commercial leases and 
pursuant to its agreements with its host department store companies.

     Effective December 20, 1991, the Company entered into a lease agreement 
with Wal-Mart for approximately 66,000 square feet of corporate office space. 
The term of the lease is ten years with a renewal option of seven years.  
The Company paid Wal-Mart approximately $215,000 annually in rental fees in 
1995, 1996, and 1997.    

     Effective July 1995, the Company entered into an operating lease for 
a computer equipment upgrade that provides processing for the newly 
installed management information and financial systems.  The term of the 
lease is three years.  Lease expense is approximately $8,000 monthly.

     Effective the first quarter 1996, the Company entered into operating 
leases for 34 vehicles.  The terms of the leases are cancelable by the 
Company at any time, but the Company expects to retain the leases for the 
three-year term.  Lease expense is approximately $13,800 monthly.

     Under the lease for its Los Angeles laboratory, the Company paid 
$102,000, $101,000, and $87,000 in rental fees in 1995, 1996, and 1997,
respectively.  In December 1997, the Company entered into a new five-year
lease for a successor facility in the Los Angeles area.  Lease expense is
approximately $5,528 monthly.

     In connection with its acquisition of Midwest Vision, Inc. (see Note 
4), the Company entered into a ten-year lease for administrative headquarters
and an optical laboratory located in St. Cloud, Minnesota.  The facility is 
leased from the former owner of Midwest Vision.  Lease expense on the 
headquarters and laboratory is approximately $6,667 monthly which, in the 
opinion of management, represents a fair market lease rate.  Additionally, 
the Company assumed operating lease agreements in connection with 51 
freestanding locations obtained from the acquisition.  Lease expense on 
such leases is approximately $64,000 monthly.

                                    Page 42 of 56<PAGE>
<PAGE>

     Aggregate future minimum payments under the license and lease 
arrangements are as follows (amounts in 000's):

              1998                         19,529
              1999                         19,296
              2000                         17,553
              2001                         14,592
              2002                         11,110
              Thereafter                   18,237
                                          -------
                                         $100,317
                                          =======
     Total expenses recognized under these license and lease arrangements 
were approximately $17.0 million, $19.9 million, and $22.8 million for the 
years ended December 30, 1995, December 28, 1996, and January 3, 1998,
respectively.

     Gitano and Guy Laroche Trademark Licenses

     The Company has separate license agreements with Gitano, Inc. and 
Guy Laroche of North America, Inc., giving the Company the right to use 
the trademarks "Gitano" and "Guy Laroche", respectively, in its vision 
centers in North America.  Each agreement requires the Company to pay 
minimum and percentage royalties on retail and wholesale sales.

     Pursuant to its terms, the Gitano agreement expired on June 30, 1997.  
The agreement has, however, continued to be performed by the parties.  
The Guy Laroche agreement, as amended, expires on December 31, 2001.  
Under the Gitano agreement, the Company paid $113,000, $111,000, and 
$121,000 in fees during 1995, 1996, and 1997, respectively.  Under 
the Guy Laroche agreement, the Company paid $150,000, $238,000, and 
$176,000 in fees during 1995, 1996, and 1997, respectively.

     Change in Control and Other Arrangements

     There are agreements between the Company and seven of its executive 
officers which provide severance benefits in the event of termination of 
employment under certain circumstances following a change in control of 
the Company (as defined).  The circumstances are termination by the Company 
other than because of death or disability commencing prior to a threatened 
change in control (as defined), or for cause (as defined), or by the officer 
as the result of a voluntary termination (as defined).  Following any such 
termination, in addition to compensation and benefits already earned, the 
officer will be entitled to receive a lump sum severance payment equal to 
up to three times the officer's annual rate of base salary.  The term of 
each agreement is for a rolling three-years unless the Company gives notice 
that it does not wish to extend such term, in which case the term of the 
agreement would expire three years from the date of the notice.

     One executive officer is employed pursuant to an employment agreement 
which provides for an annual salary and certain other benefits.  Such 
agreement further provides that the Company may at any time terminate 
the executive's employment upon six months notice or upon no notice if 
such termination is for cause, as defined.  

                                    Page 43 of 56<PAGE>
<PAGE>

9.   INCOME TAXES

     The Company accounts for income taxes under Statement of Financial 
Accounts Standards (SFAS) No. 109 "Accounting for Income Taxes," which 
requires the use of the liability method of accounting for deferred income 
taxes.  The components of the net deferred tax assets/(liabilities) are as 
follows (amounts in 000's):

<TABLE>
<CAPTION>
                                                        As of December 28,                    As of January 3,
                                                               1996                                 1998  
<S>                                                           <C>                                  <C>
Total deferred tax (liabilities)                              $(9,484)                             $(9,005)
Total deferred tax assets                                      10,658                                8,738
Valuation allowance                                            (2,406)                              (2,406)
                                                              -------                              -------
Net deferred tax (liabilities)                                $(1,232)                             $(2,673)
                                                              =======                              =======
</TABLE>

     The sources of the difference between the financial accounting and tax 
basis of the Company's liabilities and assets which give rise to the deferred 
tax liabilities and deferred tax assets and the tax effects of each are as 
follows (amounts in 000's):

<TABLE>
<CAPTION>
                                                        As of December 28,                    As of January 3,
                                                               1996                                  1998 
                                                               ----                                  ----
<S>                                                           <C>                                 <C>
Deferred tax liabilities:
  Depreciation                                                $ 6,062                             $ 5,506
  Reserve for foreign losses                                    3,137                               3,137
  Store preopening costs                                           91                                  99
  Other                                                           194                                 263
                                                              -------                             -------
                                                              $ 9,484                             $ 9,005
                                                              =======                             =======
Deferred tax assets:
  Accrued expenses and reserves                               $ 1,471                             $ 1,393
  Inventory basis differences                                     326                                 145
  Net operating loss carryforwards                              8,650                               4,677
  Alternative minimum tax                                         135                               2,117
  Other                                                            76                                 406
                                                              -------                             -------
                                                              $10,658                             $ 8,738
                                                              =======                             =======
</TABLE>

                                    Page 44 of 56<PAGE>
<PAGE>
     The consolidated provision for income taxes consists of the following 
(amounts in 000's):
<TABLE>
<CAPTION>
                                                                                     Year Ended
                                                           -------------------------------------------------------------
                                                           December 30,              December 28,            January 3,
                                                               1995                      1996                   1998
                                                               ----                      ----                   ----
<S>                                                            <C>                       <C>                    <C>
Current:
  Federal                                                      $ 50                      $  135                 $1,937
  State                                                          50                          63                    330
                                                               ----                      ------                 ------
                                                                100                         198                  2,267
                                                               ----                      ------                 ------
Deferred:
  Federal                                                                                   897                  1,296
  State                                                                                     105                    145
                                                               ----                      ------                 ------
                                                                  0                       1,002                  1,441
                                                               ----                      ------                 ------
Total provision for income taxes                               $100                      $1,200                 $3,708
                                                               ====                      ======                 ======
</TABLE>

     The tax expense (benefit) differs from the amounts resulting from 
multiplying income before income taxes by the statutory federal income tax 
rate for the following reasons (amounts in 000's):
<TABLE>
<CAPTION>
                                                     Year Ended December 30,         December 28,            January 3,
                                                               1995                      1996                   1998
                                                               ----                      ----                   ----
<S>                                                            <C>                       <C>                    <C>
Federal income tax (benefit) at statutory rate                 $(483)                    $1,591                 $3,156
State income taxes, net of federal income 
   tax benefit                                                    50                         69                    314
Foreign losses not deductible for U.S. 
   federal tax purposes                                          686                         63                     65
Valuation allowance for U.S. state and
   federal taxes                                                (181)                      (556)                       
Other                                                             28                         33                    173
                                                                ----                     ------                 ------
                                                                $100                     $1,200                 $3,708
                                                                ====                     ======                 ======
</TABLE>

     At January 3, 1998, the Company recorded a valuation allowance of 
$2.4 million due to the uncertainty regarding the realizability of its 
net operating loss carryforwards.  A portion of the net operating loss 
carryforward deferred tax asset (approximately $3.2 million) relates 
to tax benefits (subject to the outcome of the audit discussed below) 
from the exercise of stock options granted by the former Chairman of the 
Company to two shareholders who own companies which recruited optometrists 
for the Company. (See Note 12.)  This benefit will be recorded as an addition
to paid-in-capital (and a reduction in the valuation allowance) when realized.

     At January 3, 1998, the Company had U.S. regular tax net operating 
loss carryforwards of $12 million (of which $8.3 million relates to the tax 
benefits from the exercise of stock options discussed above) which can 
reduce future federal income taxes.  If not utilized, these carryforwards 
will expire beginning in 2007.  

                                    Page 45 of 56<PAGE>
<PAGE>
     As a result of an examination by the Internal Revenue Service ("IRS")
of the Company's 1992 tax return, the Company received a deficiency notice 
in 1996 from the IRS, challenging the tax benefit relating to the exercise of 
stock options referred to above.  The Company has filed a petition in the 
U.S. Tax Court, contesting the deficiency notice.  The Company does not 
expect that the outcome of this proceeding will have a material adverse
impact on the financial statements or conditions of the Company.  Subject to 
the execution of definitive documents, an agreement to settle this matter was 
reached in February 1998.  (See Note 15.)

     In Mexico, the location of the Company's major foreign operations, 
the Company pays the greater of its income tax or an asset tax.  Because 
the Company has operating losses in Mexico, the Company pays no income tax,
but it is subject to the asset tax.  Therefore, no provision for income 
taxes has been made on the Company's books for its operations in Mexico.

10.  EARNINGS PER COMMON SHARE

     In 1997, the Company adopted SFAS No. 128, "Earnings per Share".  Basic 
earnings per common share were computed by dividing net income by the 
weighted average number of common shares outstanding during the year.  
Diluted earnings per common share were computed as basic earnings per
common share, adjusted for outstanding stock options that are dilutive.  The 
computation for basic and diluted earnings per share may be summarized as 
follows (amounts in 000's except per share information):
<TABLE>
<CAPTION>
                                           1995           1996           1997
                                           ----           ----           ----
<S>                                        <C>           <C>           <C>
Net Income (Loss)                          $(1,520)      $ 3,480       $ 5,573
                                           =======       =======       =======
Weighted Shares Outstanding                 20,538        20,618        20,676
  Basic Earnings (Loss) per Share           ($0.07)        $0.17         $0.27
                                           =======       =======       =======
Weighted Shares Outstanding                 20,538        20,618        20,676
Net Options Issued to Employees                               88           163
                                           -------       -------       -------
Aggregate Shares Outstanding                20,538        20,706        20,839
Diluted Earnings (Loss) per Share           ($0.07)        $0.17         $0.27 
                                           =======       =======       =======
</TABLE>
     Outstanding options with an exercise price below the average price
of the Company's common stock have been included in the computation of 
dilutive earnings per common share, using the treasury stock method, as of 
the date of the grant.  Stock options have been excluded from the calculation 
of weighted average shares outstanding during 1995, as the effect would be 
antidilutive.

11.  SUPPLEMENTAL DISCLOSURE INFORMATION

     Supplemental disclosure information is as follows (amounts in 000's):
<TABLE>
<CAPTION>
     (i) Supplemental Cash Flow Information

                                 1995                  1996              1997
                                 ----                  ----              ----
<S>                             <C>                   <C>               <C>
Cash paid for-
  Interest                      $2,750                $2,565            $1,582
  Income taxes                     244                   149             2,383
</TABLE>
                                    Page 46 of 56<PAGE>
<PAGE>
     (ii) Supplemental Noncash Investing and Financial Activities     

     The acquisition information relates to the ELI and SPI transactions
     and the purchase of Midwest Vision, Inc. (see Notes 3 and 4).

                                                                 1997
                                                                 ----
     Business acquisitions, net of cash acquired
       Fair value of assets acquired                            $4,459
       Purchase price in excess of net assets acquired           6,671
       Liabilities assumed                                      (8,022)
       Stock issued                                               (836)
                                                                ------
     Net cash paid for acquisitions                             $2,272

     (iii) Supplemental Balance Sheet Information            

     Significant components of accrued expenses and other current
     liabilities may be summarized as follows:

                                                       1996      1997
                                                       ----      ----
     Accrued employee compensation and benefits       $2,903    $5,425
     Accrued license fees                              1,851     2,349

     At January 3, 1998, accrued expenses and other current liabilities 
     include an increase of $875,000 related to the Midwest Vision 
     operation.

     (iv) Supplemental Income Statement Information

     The components of other expense, net, may be summarized as follows:

<TABLE>
<CAPTION>
                                                            1995         1996         1997
                                                            ----         ----         ----
     <S>                                                  <C>          <C>          <C>
     Interest expense on debt and capital leases          $2,818       $2,338       $1,853
     Purchase discounts on invoice payments                 (230)        (430)        (483)
     Finance fees and amortization of
       hedge and swap agreements                             150          230          236
     Interest income                                         (99)         (66)         (38)
     Other                                                   (13)          12          (14)
                                                          ______       ______       ______
                                                          $2,626       $2,084       $1,554
                                                          ======       ======       ======
</TABLE>

12.   EQUITY TRANSACTIONS

     Employee Stock Option and Incentive Award Plan

     In 1996, the Company adopted the Restated Stock Option and Incentive 
Award Plan (the "Plan") pursuant to which incentive stock options 
qualifying under Section 422A of the Internal Revenue Code and nonqualified 
stock options may be granted to key employees.  The Plan also provides for 
the issuance of other equity awards, such as awards of restricted stock.  
The Plan replaced and restated all the Company's prior employee stock 
option plans.  A total of up to 3,350,000 shares of common stock may be 
granted under the Plan (a total of up to 2,350,000 shares were available 
for grant under the prior plans).  The Plan is administered by the 
Compensation Committee of the Company's Board of Directors.  The 

                                    Page 47 of 56<PAGE>
<PAGE>
Compensation Committee has the authority to determine the persons 
receiving options, option prices, dates of grants, and vesting periods, 
although no option may have a term exceeding ten years.  Options granted 
prior to 1996 have a term of five years.  

     Directors' Stock Option Plan

     In April 1997, the Company adopted the Restated Non-Employee Director 
Stock Option Plan (the "Directors Plan"), pursuant to which stock options 
for up to 500,000 shares of Common Stock may be granted to nonemployee 
directors.  The Directors Plan replaced and restated the Company's prior 
non-employee director stock option plan.  The Directors Plan provides for 
automatic grants of options to purchase 7,500 shares of the Company's 
common stock to each nonemployee director serving on the date of each 
annual meeting of shareholders, beginning with the 1997 annual meeting.  Of 
the options granted, 50% of the shares under each option are exercisable 
on the second anniversary of the grant date, 75% in three years, and 
100% in four years.  All option grants are at exercise prices no less 
than the market value of a share of Common Stock on the date of grant 
and are exercisable for a ten-year period.  Options granted under the 
predecessor stock option plan are exercisable for a five-year period.  
Options covering 67,500 shares under the Directors Plan were exercisable 
at January 3, 1998.  

     Restricted Stock Awards

     Restricted stock grants, with an outstanding balance of 54,000 shares 
at January 3, 1998, were awarded to certain officers and key employees which 
require five years of continuous employment from the date of grant before
vesting and receiving the shares without restriction.  The number of shares
to be received without restriction is based on the Company's performance 
relative to a peer group of companies.  Unamortized  deferred compensation
expense with respect to the restricted stock amounted to $225,000 at January 3,
1998 and is being amortized over the five-year vesting period.  Deferred 
compensation expense aggregated $54,000 in 1997.  A summary of restricted
stock granted during 1997 is as follows:  

                                                 1997
                                                 ----
          Shares granted                        60,000
          Shares forfeited                       6,000
          Weighted-average fair value of
            stock granted during year            $4.81

     All Stock Option Plans 

     All exercise prices represent the estimated fair value of the Common 
Stock on the date of grant as determined by the Board of Directors.  Of the 
options granted, 50% of the shares under each option are exercisable after 
two years from the grant date, 75% in three years, and 100% in four years.  


                                    Page 48 of 56<PAGE>
<PAGE>
     Stock option transactions during the three years ended January 3, 1998
were as follows:
<TABLE>
<CAPTION>
                                                 1995              1996             1997
                                                 ----              ----             ----
<S>                                            <C>               <C>              <C>
Options outstanding beginning of year          1,736,150         1,813,195        1,950,166
Options granted                                  576,044           395,305          631,864
Options exercised                                (75,927)          (55,371)          (7,840)
Options cancelled                               (423,072)         (202,963)        (279,987)
                                               ---------         ---------        ---------
Options outstanding end of year                1,813,195         1,950,166        2,294,203
                                               =========         =========        =========
Options exercisable end of year                  386,644           734,109        1,020,674
                                               =========         =========        =========
Weighted average option 
  prices per share:
  Granted                                        $4.638            $3.394           $4.878
  Exercised                                      $0.248            $0.278           $2.168
  Cancelled                                      $8.376            $7.816           $9.640
Outstanding at year end                          $7.569            $6.904           $6.028

Options exercisable end of year                 $11.376            $9.806           $7.891

</TABLE>

     The Company has adopted the disclosure provisions of Statement 
of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation."  The Company will continue to account for stock option 
awards in accordance with APB Opinion No. 25.  Had compensation cost for 
the Plan been determined based on the fair value at the grant date for 
awards in 1995, 1996 and 1997 consistent with the provisions of SFAS No. 123, 
the Company's net earnings and earnings per share would have been reduced 
to the pro forma amounts indicated below (amounts in 000's except per share 
information):
                                  1995         1996         1997
As Reported:                      ----         ----         ----

Net Earnings (Loss)             ($1,520)      $3,480       $5,573
                                =================================
Earnings per share               ($0.07)       $0.17        $0.27
                                =================================
Pro Forma: 

Net Earnings (Loss)             ($1,769)      $3,163       $5,142
                                =================================
Earnings per share               ($0.09)       $0.15        $0.25
                                =================================

     Basic and diluted earnings per share are the same for each year.

                                    Page 49 of 56<PAGE>
<PAGE>
     The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option-pricing model.  The following weighted 
average assumptions were used in the model:

                                  1995         1996         1997
                                  ----         ----         ----

Dividend Yield                    0.00%        0.00%        0.00%

Expected Volatility                 86%          86%          74%

Risk Free Interest Rates          6.70%        5.90%        6.14%

Expected Lives (years)            4.34         4.34         4.51 

The following table shows the options outstanding and the options 
exercisable with pertinent data related to each:

<TABLE>
<CAPTION>
                            Options Outstanding                                 Options Exercisable
-----------------------------------------------------------------------------------------------------------
                                      Weighted
                                       Average            Weighted          Number          Weighted
                      Number          Remaining           Average         Exercisable       Average
Range of            Outstanding      Contractual          Exercise           As of          Exercise
Exercise Prices     As of 1/3/98         Life              Price            1/3/98           Price
------------------------------------------------------------------------------------------------------------
<S>                 <C>                 <C>               <C>             <C>               <C>
$3.12 - $4.81         890,877           7.48               $4.059            79,856          $3.863 
$4.88 - $7.00       1,022,915           3.17               $5.417           562,157          $5.490 
$7.25 - $21.38        380,411           0.90              $12.282           378,661         $12.306 
                    ---------           ----              --------        ---------         --------
$3.12 - $21.38      2,294,203           4.47               $6.028         1,020,674          $7.891 

</TABLE>

     Principal Shareholder Transactions

     On November 13, 1990, in consideration of the services rendered by 
two principals in two companies recruiting optometrists for the Company 
(Note 3), the then Chairman and largest shareholder of the Company entered 
into option agreements which granted each of the two principals the option 
(the "Option") to acquire from the then Chairman 683,775 shares of Common 
Stock.  The Options were exercised in 1992 and 1994.

     Upon the exercise of all the Options, the Company became entitled to 
a tax benefit valued at approximately $4.1 million, which is equal to the 
number of option shares multiplied by the difference between the market price 
of the option shares as of the date of exercise and the exercise price for 
the option shares, adjusted for the impact of tax rates.  The tax benefit 
will be treated as a contribution to capital and will have no impact on 
earnings for financial reporting purposes.  The timing and the amount of 
the benefit from the tax deduction will depend on future earnings of the 
Company.  The Company has recorded a valuation allowance against the tax 
benefit.  The Company has received a deficiency notice from the Internal 
Revenue Service with respect to the tax benefit the Company expects to 
realize from the exercise of the Options.  (See Note 9.)


                                    Page 50 of 56<PAGE>
<PAGE>
     Preferred Stock

     The Company is authorized to issue up to 5,000,000 shares of preferred 
stock, par value $1 per share, with such terms, characteristics and 
designations as may be determined by the Board of Directors.  No such 
shares are issued and outstanding.  

     Shareholder Rights Plan

     In January of 1997, the Company's Board of Directors approved a 
Shareholders Rights Plan (the "Rights Plan").  The Rights Plan provides for 
the distribution of one Right for each outstanding share of the Company's 
Common Stock held of record as of the close of business on January 27, 1997 
or that thereafter becomes outstanding prior to the earlier of the final 
expiration date of the Rights or the first date upon which the Rights become 
exercisable.  Each Right entitles the registered holder to purchase from the 
Company one one-hundredth of a share of Series A Participating Cumulative 
Preferred Stock, par value $0.01 per share, at a price of $40.00 (the 
"Purchase Price"), subject to adjustment.  The Rights are not exercisable 
until ten calendar days after a person or group (an "Acquiring Person") buys 
or announces a tender offer for 15% or more of the Company's Common Stock, 
or if any person or group has acquired such an interest, the acquisition by 
that person or group of an additional 2% of the Company's Common Stock.  In 
the event the Rights become exercisable, then each Right will entitle the 
holder to receive that number of shares of Common Stock (or, under certain 
circumstances, an economically equivalent security or securities of the 
Company) having a market value equal to the Purchase Price.  If, after any 
person has become an Acquiring Person (other than through a tender offer 
approved by qualifying members of the Board of Directors), the Company 
is involved in a merger or other business combination where the Company 
is not the surviving corporation, or the Company sells 50% or more of 
its assets, operating income, or cash flow, then each Right will entitle 
the holder to purchase, for the Purchase Price, that number of shares of 
common or other capital stock of the acquiring entity which at the time 
of such transaction have a market value of twice the Purchase Price.  The 
Rights will expire on January 26, 2007, unless extended, unless the Rights 
are earlier exchanged, or unless the Rights are earlier redeemed by the 
Company in whole, but not in part, at a price of $0.001 per Right.  The 
Shareholder Rights Plan was amended in February 1998. (See Note 16.)



                                    Page 51 of 56
<PAGE>
<PAGE>
13.  SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

     Selected quarterly data for the Company for the fiscal years ended 
December 28, 1996 and January 3, 1998 is as follows  (amounts in 000's except 
per share information).  The fourth quarter of fiscal 1997 consisted of 14 
weeks; all other quarters consisted of 13 weeks.

<TABLE>
<CAPTION>


YEAR ENDED DECEMBER 28, 1996:
                                                                                  Quarter Ended
--------------------------------------------------------------------------------------------------------------------------------
                                                        March 30            June 29           September 28          December 28
                                                        --------            -------           ------------          -----------
<S>                                                     <C>                 <C>                  <C>                  <C>
Net Sales                                               $40,133             $40,525              $41,347              $38,371 
Cost of Goods Sold                                       18,724              19,133               19,684               19,151 
                                                        -------             -------              -------              -------
Gross Profit                                             21,409              21,392               21,663               19,220 
Selling, General, and
 Administrative Expenses                                 19,386              19,202               19,679               18,653 
                                                        -------             -------              -------              -------
Operating Income                                          2,023               2,190                1,984                  567 
Other Expense, Net                                          659                 507                  453                  465 
                                                        -------             -------              -------              -------
Income Before Income Taxes                                1,364               1,683                1,531                  102 
Provision for Income Taxes                                  373                 431                  321                   75
                                                        -------             -------              -------              -------
Net Income                                              $   991             $ 1,252              $ 1,210              $    27 
                                                        =======             =======              =======              =======

Basic Earnings per Common Share                         $   .05             $   .06              $   .06              $    -- 
                                                        =======             =======              =======              =======
Diluted Earnings per Common Share                       $   .05             $   .06              $   .06              $    -- 
                                                        =======             =======              =======              =======
</TABLE>

                                    Page 52 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>

YEAR ENDED JANUARY 3, 1998:
                                                                                  Quarter Ended   
--------------------------------------------------------------------------------------------------------------------------------
                                                        March 29            June 28           September 27          January 3
                                                        --------            -------           ------------          ---------
<S>                                                     <C>                 <C>                  <C>                 <C>
Net Sales                                               $44,362             $44,512              $45,862             $51,618
Cost of Goods Sold                                       20,143              20,654               20,926              24,640 
                                                        -------             -------              -------             -------
Gross Profit                                             24,219              23,858               24,936              26,978 
Selling, General, and
 Administrative Expenses                                 20,971              20,793               21,559              25,833 
                                                        -------             -------              -------             -------
Operating Income                                          3,248               3,065                3,377               1,145 
Other Expense, Net                                          488                 391                  314                 361 
                                                        -------             -------              -------             -------
Income Before Income Taxes                                2,760               2,674                3,063                 784 
Provision for Income Taxes                                1,107               1,054                1,204                 343 
                                                        -------             -------              -------             -------
Net Income                                              $ 1,653             $ 1,620              $ 1,859             $   441 
                                                        =======             =======              =======             =======

Basic Earnings per Common Share                         $   .08             $   .08              $   .09             $   .02 
                                                        =======             =======              =======             =======
Diluted Earnings per Common Share                       $   .08             $   .08              $   .09             $   .02 
                                                        =======             =======              =======             =======
</TABLE>

14.  DISPOSITIONS

     Sale of French Operations  

     On December 29, 1995, the Company sold its shares in IVACAR, S.A., its 
French subsidiary, to Carrefour France, for the sum of 18,000,000 FF 
($3.7 million U.S.), paid in cash at the closing.  The initial sum was 
received the first business day of 1996.  In connection with this transaction, 
the Company recorded a gain of $491,000 in 1995.  Such gain was offset by 
the provisions discussed below.

     Sale of Venture Operations

     The Venture operations were disposed of in the fourth quarter 1995 
and the first quarter 1996.  In anticipation of the disposition of the 
Venture operations, a provision of $1.4 million was recorded in 1995 to 
reduce the net assets of the Venture operations to management's estimate 
of net realizable value.  

     Net sales and operating losses for each operation (exclusive of 
disposition costs, allocated corporate overhead, interest and taxes) for 
each period presented is summarized as follows (000's):

                                              Venture                France

Year Ended December 28, 1996
    Net Sales                                 $    37                $   402 
    Operating Losses                          $   (81)               $  (240)

Year Ended December 30, 1995
    Net Sales                                 $ 2,257                $ 5,117 
    Operating Losses                          $(2,073)               $  (523)

                                    Page 53 of 56<PAGE>
<PAGE>
     Investment in Czech Republic and Slovakia

     In 1995, the Company decided that it would pursue the disposition of its 
interest in the joint venture which operated three vision centers in Eastern 
Europe.  A provision has been recorded to reflect management's estimate of net 
realizable value of the Company's investment in such joint venture.  

     Aurrera Store Closures

     In 1995, the Company decided to close 16 underperforming vision centers 
located in Aurrera stores.  The Mexican operations recorded a $346,000 
provision to reduce the assets in those locations to management's estimate 
of net realizable value and record separation costs for employees.  The 
Company closed six vision centers in February 1995 and the remainder in the 
first quarter 1996.

     Foreclosure Proceedings - Frame Manufacturer

     In February 1995, the Company foreclosed on its security interest 
covering the assets of CompuFrame, a frame manufacturer.  The Company 
recorded a provision of $400,000 to reduce the net carrying amount of assets 
held for sale to management's estimate of their net realizable value.  The 
remaining assets were liquidated in 1996.  

     The net assets of the Venture operations and the frame manufacturer 
were classified as assets held for sale in the current asset section 
of the Company's balance sheet at December 30, 1995.  The dispositions 
were completed in 1996.  For purposes of the accompanying statements of cash
flows, the change in components comprising assets held for sale is reflected
in the original balance sheet classification.

15.  REPORTABLE BUSINESS SEGMENTS

     The Company's operating business segments provide quality retail optical 
services and products that represent high value and satisfaction to the 
customer.  Vision centers offer eyewear through each retail location, which 
includes eyeglasses, contact lenses, and sunglasses.  Optometrists are 
available on-site to provide eye examinations.  The separate businesses within
the Company use the same production processes for eyeglass lens manufacturing, 
offer products and services to a broad range of customers and utilize the 
Company's central administrative offices to coordinate product purchases and 
distribution to retail locations.  A field organization provides management 
support to individual store locations.  The Mexico operation has a separate 
laboratory and distribution center in Mexico and buys a majority of its 
products from local vendors.  However, market demands, customer requirements, 
laboratory manufacturing and distribution processes, as well as product 
offerings, are substantially the same for the domestic and Mexico business.  
Consequently, the Company considers its domestic and Mexico businesses as one 
reportable segment under the definitions required by SFAS 131 - Disclosures 
about Segments of an Enterprise and Related Information.


                                    Page 54 of 56<PAGE>
<PAGE>

     Information relative to sales and identifiable assets for the United
States and Mexico for the fiscal years ended December 30, 1995, December 28, 
1996, and January 3, 1998 are summarized in the following tables (amounts in 
000's).  Identifiable assets include all assets associated with operations 
in the indicated reportable segment excluding intercompany receivables and 
investments.  

<TABLE>
<CAPTION>
    1997                                   United States         Mexico        Other        Consolidated
    ----                                   -------------         ------        -----        ------------
<S>                                         <C>                  <C>          <C>            <C>
Sales                                       $182,333             $2,988       $1,033         $186,354
                                            ========             ======       ======         ========
Identifiable Assets                         $ 80,284             $2,279       $  687         $ 83,250
                                            ========             ======       ======         ========

    1996 
    ---- 
Sales                                       $156,599             $2,068       $1,709         $160,376
                                            ========             ======       ======         ========
Identifiable Assets                         $ 72,209             $1,811       $  544         $ 74,564
                                            ========             ======       ======         ========

    1995 
    ---- 
Sales                                       $136,633             $2,915       $6,025         $145,573
                                            ========             ======       ======         ========
Identifiable Assets                         $ 74,270             $2,611       $4,356         $ 81,237
                                            ========             ======       ======         ========
</TABLE>

16.  SUBSEQUENT EVENTS

     In February 1998, the Company's Board of Directors amended the Company's 
Shareholder Rights Plan (See Note 12) effective March 1, 1998 to provide 
that Rights under such plan can be redeemed and certain amendments to such 
plan can be effected only with the approval of the Continuing Directors,
which are defined in the Rights Plan as the current directors and any future
directors that are approved or recommended by Continuing Directors.

     In February 1998, the Company and the Internal Revenue Service agreed,
subject to execution of definitive settlement documents, to settle litigation
in the U.S. Tax Court arising out of the grant and exercise of certain stock
options. (See Notes 9 and 12.)  The settlement provides that the Company will
receive substantially all of the deduction it has claimed.






                                    Page 55 of 56<PAGE>
<PAGE>
<TABLE>
<CAPTION>
                                       SCHEDULE II


                    NATIONAL VISION ASSOCIATES, LTD. AND SUBSIDIARIES
                            VALUATION AND QUALIFYING ACCOUNTS
                December 30, 1995, December 28, 1996, and January 3, 1998
                                         (in 000's)


                                                              Additions
                                                    ------------------------------
                             Balance at             Charged to          Charged to                             Balance at   
Description             Beginning of Period      Cash and Expense      Other Accounts       Deductions        End of Period 
-----------             -------------------      ----------------      --------------       ----------        -------------

<S>                              <C>                    <C>                                    <C>                   <C>
Year ended
December 30, 1995:
  Allowance for
  Uncollectible 
  Accounts Receivable            $253                    $216                                   $130                $339

Year ended 
December 28, 1996:
  Allowance for
  Uncollectible
  Accounts Receivable            $339                    $177                                   $163                $353

Year ended
January 3, 1998:
  Allowance for
  Uncollectible
  Accounts Receivable            $353                    $928                                   $519                $762 


</TABLE>



                                    Page 56 of 56