Stanley Lifestyle limited IPO: A Bright Future for India’s Fashion Industry

Stanley Lifestyle Limited Introduction

Stanley Lifestyle Limited is a public unlisted company based in Bangalore, Karnataka, known for manufacturing high-quality and stylish home furniture products. Incorporated on 11 October 2007, it offers a variety of furniture including sofa sets, beds, tables, chairs, and more. The company emphasizes craftsmanship and attention to detail in its designs

Brief about Company of Stanley Lifestyle Limited

Summary of the business of our Company of Stanley Lifestyle Limited

Company is a super-premium and luxury furniture brand in India and among the few home-grown super-premium and luxury consumer brands in India operating at scale in terms of manufacturing as well as retail operations . We retail our furniture products under the “Stanley” brand with wide range of home solutions offerings, such as sofas, arm chairs, kitchen cabinets, beds, mattresses and pillows, amongst others.

History of Stanley Lifestyle Limited

Promoters commenced operations by providing car seat leather upholstery services for leading global automotive brands and subsequently transitioned to retailing luxury furniture in India. Leveraging the experience of our Promoters in offering luxury leather upholstery, we opened our first retail store in Bengaluru, Karnataka in 2011. Over the years, we have transitioned from a sales driven model towards design led operations and have

transformed into a comprehensive provider of home solutions. Over the years, we have transformed into a comprehensive provider of home solutions and are the only super-premium and luxury Indian brand that provide a wide range of home solutions offerings, such as sofas, arm chairs, kitchen cabinets, beds, mattresses and pillows, amongst others

Management of Stanley Lifestyle Limited

Share Holding pattern of Stanley Lifestyle Limited

Qualitative Factors of Stanley Lifestyle Limited

• Largest and the fastest growing brand in the luxury/super-premium furniture segment;
• Comprehensive home furniture provider with offerings across categories and price points;
• Pan-India presence with strategically located stores;
• Focus on design-led product innovation;
• Vertically integrated manufacturer with skilled craftmanship capabilities;
• Efficient business model with track record of delivering financial growth; and
• Promoter-led company with experienced professional and senior management team.

Strategy of Stanley Lifestyle Limited

• Continue to expand our retail presence within India and abroad by leveraging the “Stanley” brand appeal
• Continue to increase brand awareness
• To evaluate and increase our presence in the B2B segment as well as enter into distribution arrangements
• Further expand our product portfolio
• To enter and expand into additional segments and
• Leverage technology to enhance customer experience and grow our operations.

Industry Outlook

The boom in the real estate market in India has enabled the furniture market in India to experience a high growth trajectory. In Fiscal 2021, the organised market accounted for 23% of the total furniture and home goods market, which increased to 26% by Fiscal 2023. Furthermore, by Fiscal 2027, the organised market is expected to contribute to 35% of the total market share, exhibiting an annual growth rate of 36%, which surpasses the growth rate of the traditional market.

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Drivers of Indian furniture and home goods market:

• Working women population
• Increasing nuclearisation
• Changing consumer preferences
• Shorter replacement cycle
• Home renovations & upgrades
• Growth of hospitality and tourism industry

Organised furniture & home goods market in India is growing faster than unorganised market

Although the traditional market holds the majority share in the industry, the initiatives (such as Make in India, Skill India and PLI scheme) and the drivers such as working women population, increasing nuclearisation, and many more have led to an increase in the organized share in India. Increase online penetration is another factor that has contributed to increase growth of organised furniture & home goods market in India. During pandemic many consumers switched to online shopping. As per Redseer estimates, there are 70-75 crore consumers who have access to internet in Fiscal 2023 and it is expected to grow at a rate of 8% annually to reach approximately 1 billion by Fiscal 2030. With the onset of advanced technologies, consumers can select from different varieties of brands and products and view them in 360 degrees. The sellers, too, on the other hand prioritised omni-channel experience to cater to the consumer’s expectations and increase their business.

THE KEY TO A LUXURY EXPERIENCE: WHAT LUXURY/SUPER-PREMIUM BRANDS DO DIFFERENTLY

Luxurious experience offered by these furniture and home goods brand makes them stand out when compared to non-luxury/super-premium brands which further drives the growth of the luxury/super-premium furniture and home goods market. Such luxurious experience is the result derived from the combination of well-chosen fabric, quality of work, durability, present and future trends imposed and many more.

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Luxury/super-premium furniture and home goods market dominates in Metro and Tier I cities

Metro and tier 1 cities actively drive 75-80% of the sales in the luxury/super-premium furniture and home goods market when compared to tier 2+ cities. This trend is primarily due to factors such as higher disposable income, the presence of high-end residential projects, an urban lifestyle and aspirations, and influence from fashion and design trends.

• Indian home interior market is poised to grow at a rate of 15% to become US$37 billion market by Fiscal 2027
• Organised interior market share to grow at a rate of 23% within Fiscal 2023 – 2027, faster than the unorganised market
• Luxury/super-premium home interiors to become US$ 5.6 billion market by Fiscal 27

CHALLENGES IN HOME INTERIOR MARKET

Home interior market faces certain challenges that impacts its efficiency and growth.

• Lack of discovery
  • The industry faces a significant challenge in streamlining and personalizing the discovery experience for consumers, as they have to rely on catalogues and online designs that are not easily replicable or customizable to their individual needs. Moreover, the industry’s fragmentation compounds the issue, forcing consumers to visit multiple stores with limited display stock and a lack of customization options.
• Unorganised market
  • The home interior market lacks high standardization, transparency, and pricing, leading to a highly unorganized state. Additionally, there is a lack of clear regulations and warranties for products utilized in interior design. As a result, comparing and evaluating different service providers becomes challenging, resulting in inconsistencies and difficulties for customers.
• Fragmented supply chain
  • Meeting client expectations and adhering to project timelines pose challenges for home interior solution providers. These providers often face hurdles in sourcing reliable suppliers and coordinating with contractors. Additionally, the lack of a well-defined procurement process and limited access to skilled labour can further hinder their efficiency and profitability.
• Lack of skilled labour
  • Shortage of skilled labour is a significant challenge within the home interior market. Finding skilled and experienced labours who has experience in designing, upholstery, carpentry, etc. can be difficult causing hinderance to project timelines, quality work and customer satisfaction. Shortage of skilled labour also causes hinderance to the adoption of new technology, materials and techniques that enhance efficiency and customer satisfaction.
• Turnaround time
  • Timely completion of projects is crucial in the home interior market. Delays can impact customer satisfaction and disrupt project timelines, leading to additional costs and customer dissatisfaction.
• Technological integration
  • Integrating technology into traditional practices poses a significant challenge for home interior solution providers, requiring substantial investment and expertise. Moreover, customer expectations create problems as compatibility issues between design software and manufacturing software often arise, resulting in unmet expectations regarding design, colour, and other factors. These challenges ultimately lead to trust concerns and a decline in customer service quality.
• Architect-driven market
  • Architects often provide comprehensive services that include not only architectural design but also interior design. By offering end-to-end solutions, architects may directly compete with home interior solution providers, eliminating the need for separate interior design services. Architects possess extensive knowledge and training in design principles, space planning, and building regulations. This expertise enables them to offer high-quality interior design services, potentially overshadowing the offerings of home interior solution providers.

Business Data of Stanley Lifestyle Limited

Verticals

• Seating Products
  • Sofas
  • Sofa-cum-Bed
  • Recliners
  • Dining Chairs
  • Pouffes
  • Bar Stools
  • Cushions
• Cased Goods
  • Coffee Tables
  • Dining Tables
  • End Tables
  • Consoles
• Kitchen and Cabinetry
  • Kitchens
  • Wardrobes
  • Laundry / Utility
  • Bar Units
  • Shoe Racks
  • Prayer Units
  • Bedside Tables
• Mattresses and Beds
  • Mattresses
  • Beds
  • Pillows and Accessories
• Automotive and Others

Product wise break-up of Stanley Lifestyle Limited

Revenue contribution from Geography presence of Stanley Lifestyle Limited

Area wise breakup of Stanley Lifestyle Limited

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State wise breakup of Stanley Lifestyle Limited

Customer dependency of Stanley Lifestyle Limited

Supplier dependency of Stanley Lifestyle Limited

Business model of Stanley Lifestyle Limited

Utilisation

Competitive Strength of Stanley Lifestyle Limited

• Largest and the fastest growing brand in the luxury/super-premium furniture segment;
• Comprehensive home solutions provider with offerings across categories and price points;
• Pan-India presence with strategically located stores;
• Focus on design-led product innovation;
• Vertically integrated manufacturer with skilled craftmanship capabilities;
• Efficient business model with track record of delivering financial growth; and
• Promoter-led company with experienced professional and senior management team.

Subsidiary companies of Stanley Lifestyle Limited

Group companies

• Design Eight Private Limited
  • The registered office of Design Eight Private Limited is situated at 203, Hall Mark Hill View Apartment, Plot No. 66 & 68, Journalist Colony, Hyderabad, Telangana 500 033. In accordance with the SEBI ICDR Regulations, the details of the reserves (excluding revaluation reserves), sales, profit/(loss) after tax, basic earnings per share, diluted earnings per share and net asset value per share derived from the audited standalone financial statements of Design Eight Private Limited for Fiscal 2021, Fiscal 2022 and Fiscal 2023 are available on the website of our Company at https://www.stanleylifestyles.com/investors/financial-information-group-companies.php

Business risk factors

• business is highly dependent on the sale of sofas and recliners. Variations in demand and changes in consumer preference for our sofa and recliner products could have an adverse effect on our business, results of operations and financial condition.
• Company is generated a substantial portion of our sales from our stores located in southern regions of India and any adverse developments affecting our operations in these regions could have an adverse impact on our revenue and results of operations.
• Company is depend on limited suppliers for the supply of leather, one of our primary raw materials. The loss of one or more such suppliers could adversely affect our business, results of operations, financial condition and cash flows.
• Company is reliant on our company owned company operated stores for a majority of our sales. Any disruptions to the operations of these channels or limitations on our ability to expand and grow these channels may adversely affect our sales, cash flow and profitability.
• A portion of our revenue from operations is generated from certain of our corporate customers. In the event such corporate customers do not continue to outsource manufacturing or avail our services, our sales, cash flows and profitability may be adversely affected.
• Under-utilization of our existing manufacturing facilities and an inability to effectively utilize our manufacturing capacities could have an adverse effect on our business, future prospects, and future financial performance.
• All of our COCO stores are operated by our Subsidiaries. Any issues with the operations of the COCO stores will have an adverse impact on our business, cash flows and business operations.

Financials

Key Financial Ratios

(₹in million, except as other wise stated)

Balance Sheet

(in ₹ million, except for share data and if otherwise stated)

Profit & Loss

Cash Flow

Capital structure

(₹in million)

SWOT

• Strengths:
  • Over 27 years of experience in manufacturing with a large facility in Bangalore.
  • Diverse product range with sub-brands catering to different market segments.
  • Reputation for high-quality and stylish furniture.
• Weaknesses:
  • Limited public financial data may affect transparency for investors.
  • High competition in the luxury furniture market.
• Opportunities:
  • Expanding online retail presence in the growing e-commerce market.
  • Potential for international expansion and export.
• Threats:
  • Economic downturns affecting luxury goods spending.
  • Increasing raw material costs impacting profit margins.

IPO Details 

Stanley Lifestyle Limited IPO Details

Why need of funds

Litigation involved

Please refer DHP page no.s 381-386

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