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Himalaya Optical eyes PE funding for expansion

Abhishek Law Kolkata | Updated on April 19, 2018 Published on April 19, 2018

With GST benefits leading to an improvement in bottomline, Kolkata-based eyewear-maker Himalaya Optical is now looking at a pan-India presence. In fact, the company is also eyeing PE funding as a part of its growth strategy.

According to Sarat Binani, Director, Himalaya improvement in bottom-line is expected by way of input tax credit and a single tax regime across States.

Multiplicity of taxes and varying rates meant that the company was absorbing a variety of costs so as to maintain cost parity across cities.

Expenses (including the input tax credit) may come down by 3 per cent and a similar improvement in bottom-line is also expected.

“We are hoping for 20 per cent increase in top line against the average 13-14 per cent growth we have seen in the previous years,” Binani said.

Pan-India growth

For a pan-India growth, the company will target tier-I and II cities and may later explore tier-III.

The company already has 114 stores, with East and North India being its prime markets.

It intends to add at least 20-25 stores this year (against 15-odd stores it had been adding annually over the last few years). The company will also expand presence in Delhi, Bengaluru, and so on. Expansion will be through a mix of own stores and franchisees.

Around ₹40 lakh to ₹1 crore will be spent on each new store depending on their size.

Himalaya will also tap PE players to fund expansion plans. In fact, some PE funds have already approached it. Fund raising options will be explored over the next one year.

With start-ups like Lenskart – backed by a set of the PE funds and the deep pocketed the Titan Eyeplus coming into play, eyewear manufacturers have been witnessing a substantial shift in retail channel choices.

A number of multi-branded retail optical shops have helped branded eyewear become more accessible via internet retailing and in department stores.

So it is no wonder that Himalaya will look to expand its presence in its bid to tap the organised eye-wear market.

Restructuring

Accordingly, the 80-year-old eyewear-maker is restructuring itself.

From a family-owned business (by the Binanis) to a professionally-run corporate, the necessary changes are already been put in place. Its board has for quite some time now included both family members and professionals.

“We are restructuring the organisation so that it is a professionally-run business rather than a family-owned one. We would like to raise funds from PEs once we give them a complete business plan with focus on profitability,” Binani said.

In fact, listing options can also be explored once the company reaches 300-odd stores over the next three to five years.

Published on April 19, 2018
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