Company Overview:
Stanley Lifestyles Limited is a super-premium and luxury furniture brand in India, one of the country’s few home-grown super-premium and luxury consumer brands. According to the RedSeer Report, the company is the fourth largest player in the home furniture segment in India based on revenue in FY23. The company’s revenue has increased primarily due to growth in retail sales and presence. The company’s furniture is sold under the “Stanley” brand. It has built brand recognition and customer loyalty with quality products and targeted marketing like ‘Beautiful Living’ and ‘Bed of Dreams’. The customers are ambassadors, generating publicity through testimonials and word-of-mouth advertising.
IPO: Stanley Lifestyles Limited is well placed to encash on the healthy growth opportunity in premium furniture market. Subscribe: SBI Securities
Key Highlights:
1. Strong retail presence: The company markets and sells luxury furniture products through 38 COCO ‘company-owned and company-operated’ stores and 24 FOFO ‘franchisee-owned and franchisee-operated’ stores across India. In some cities, the company combines different store formats under one roof for an enhanced customer experience. For example, the company’s store at Hosur Road, Bengaluru, Karnataka, features both ‘Stanley Level Next’ and ‘Sofas & More by Stanley’ concepts. The company retails its furniture products primarily through three store formats, each catering to a different segment of the market i.e., 1) Stanley Level Next targets customers in the ultra-luxury home solution price points. 2) Stanley Boutique targets customers in the luxury category price points. 3) Sofas & More by Stanley targets customers in the super-premium price points.
2. Integrated manufacturing facility: The company has two manufacturing facilities in Bengaluru, Karnataka. One is at Electronic City and is dedicated to producing bespoke products under the ‘Stanley’ brand. The other facility, located at Bommasandra Jigani Link Road, specializes in contract manufacturing for multinational home furnishing players. The company’s manufacturing capabilities ensure reliability, craftsmanship, design, and customization of products, offering luxury home furniture with better aesthetics to customers.
3. Focus on design-led innovation: Customer preferences vary across regions. With 15 years of experience in retailing furniture products, the company has insights into customer requirements, trends, and design preferences. They design products with luxurious international appeal that align with Indian sentiment and sizing, which has been well-received. The company’s product development division spans approximately 15,000 square feet at Electronic City facility, with one master Italian and 48 employees engaged in product design and development as of Dec’23. In FY23, the company designed and manufactured 88 new products. The company’s product range under the ‘Stanley’ brand includes modern power motion recliner sofas, home cinema seating, sofa-cum-beds, dining tables, storage beds, kitchens and cabinetry, walk-in wardrobes, and laundry units.
Valuation: The company is valued at FY23/FY24 annualised EV/Sales and EV/EBITDA multiple of 4.4x/4.4x and 22.2x/23.9 based on the upper price band on the post-issue capital. The company’s Revenue/PAT has grown at a CAGR of 46%/465% between FY21-FY23. The company is raising Rs 200 cr through fresh issue, out of which it plans to spend Rs 90 cr to open 24 new stores between FY25–FY27, which will significantly contribute to the company’s topline. Industry growth for the luxury/super-premium furniture and home goods market is set to grow at a CAGR of 34% from USD 1.5 bn to USD 4.8 bn between F23-FY27 period. Stanley is well placed to encash on the healthy growth opportunity in premium furniture market.
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