Inspecs, an ‘eyewear design’ company chaired by Lord Ian MacLaurin, the former chairman and chief executive of groceries giant Tesco, is said to be ‘looking into’ the possibility of a £170 million IPO. The company both designs frames for brands such as Superdry Radley and manufactures frames for mass market brands Specsavers and Vision Express. The company has been advised that a valuation of £170 million would be realistic if it decides to go public. At that value Bath-based Inspecs would hope to raise £60 million.
Still 60% owned by the family of founder Robin Totterman, who set the company up in 1988 when the ex-bond trader couldn’t find a pair of glasses whose frame he liked, the company’s sales totalled £45 million last year. That translated into underlying earnings of £6.2 million.
At the projected £170 valuation, the Totterman family stake would be worth a total £102 million. Other beneficiaries would include the private equity companies Harwood and Henderson. Lord MacLaurin joined the company in 2017 and it would now appear his appointment was made with a mind to preparing the company for stock market listing.
A price to earnings ratio of x28 on 2018’s underlying earnings might seem steep for a design and contract-manufacturing company but the eyewear market is currently going through something of a renaissance and showing strong growth.
Transparency Market Research forecasts the global eyewear market’s value to reach over $265 billion by 2025 from $137 billion in 2016. That equates to a very healthy CAGR rate of 8.3% over the 8 years covering 2017-2025.
Growing demand for eyewear products is being driven by a combination of factors. Increasing screen time means more people than ever before feel the need to wear glasses to aid tired eyes or are having them prescribed. Sunglasses, which is a major market for Inspecs, is also a segment that has seen huge growth over the past decade or so.
Whereas before the average consumer would own one pair of sunglasses many now interchange several, matching them to occasions and outfits like any other fashion accessory. And they are prepared to pay for design and quality.
A further factor is growing disposable income in parts of the world where consumers would have once opted for the cheapest possible solution to sight impediments. The market for mid to upper price range models of glasses and sunglasses is growing quickly in developing economies, particularly those in Asia.
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