About STANLEY LIFESTYLES Limited

Stanley Lifestyles Limited 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. Further, they are the fourth largest player in the home furniture segment in India in terms of revenue in Fiscal 2023. They have the distinction of being among the first few Indian companies to venture into the super-premium and luxury furniture segment and one of the few Indian company present across various price points, i.e., super-premium, luxury and ultra-luxury segment, through their various brands. They ventured into Leather Sofas in 1999 and then gradually diversified into Full Home Solutions. Today, they offer a spectrum of collections for the Living Room, including Sofas, Coffee Tables, TV Cabinets, Storage Units, and Side Tables. For the Kitchen & Dining area, they provide Kitchen Cabinets, Dining Tables, and Storage Units. Additionally, for Bedrooms, their range includes Beds, Mattresses, and Wardrobes. As India's only Fully Integrated Furniture Manufacturer, Retailer, and Exporter, they take pride in their comprehensive offerings.

They retail their furniture products under the “Stanley” brand. Over the years, they have developed brand recognition and customer loyalty through their quality products, as well as targeted marketing strategies and advertisement campaigns such as “Beautiful Living”, “Design Glamour”, “Luxury Unlimited” and “Bed of Dreams”. Their vision is to move beyond Furniture by Offering Complete Home Solutions, Exceptional Service and Quality Assurance of a Deep Rooted Manufacturing Brand.

INDIAN FURNITURE AND HOME GOODS MARKET

INDIAN FURNITURE AND HOME GOODS MARKET TO BECOME US$ 49 BILLION MARKET BY FISCAL 2027. The boom in the real estate market in India has enabled the furniture market in India to experience a high growth trajectory. Rapid urbanization, high rising incomes, and an increasing shift towards tier-level cities are causing housing properties to flourish across India. Consequently, a high growth trajectory is expected in the demand for furnishing personal places. During Fiscal 21, the home and furniture market contributed approximately 0.38% to the GDP, and this contribution has increased to approximately 0.56% in Fiscal 2023.

A paradigm shift is anticipated in the home and furniture industry over the years, driven by the expansion of a well-aware consumer base. The growth is further fuelled by the entry of numerous international brands and the proliferation of branded showrooms across the country. As of Fiscal 21, the home and furniture market were about US$ 10 billion, which is estimated to increase to US$ 19 billion by Fiscal 2023. The market is further subject to increase at a growth rate of 27% reaching US$ 49 billion by Fiscal 2027. Of the total home and furniture market in Fiscal 2023, furniture contributes to 55% when compared to home goods which is at 45%. 

India has home interiors market of US$ 21 billion in Fiscal 2023 which is projected to grow by 15% to reach US$ 37 billion by Fiscal 2027. The growth in the home interior market is driven by increase in new property sales. A major trend in the market is also the emergence of interior designers as the influencers who are leveraging social media to drive home interiors business both through personal studios and through partnership with home interior platforms.

Luxury/super-premium furniture and home goods market is expected to reach US$ 4.8 billion by Fiscal 2027. The luxury/super-premium furniture & home goods market in India constitutes 8% of the overall market. The rise of dual income households in India will further contribute to the growth of the furniture market as families will have increased discretionary income at their disposal. The desire of the urban millennial and Gen Z population to stay updated with the latest décor trends, largely influenced by social media and influencers, is driving consumer demand towards better quality products, thereby leading to an increase in purchases within the luxury/super- premium product segment. The increasing demand for luxury/super-premium products is also fuelled by factors such as the growing number of nuclear families, higher disposable income, and urbanization. 

India currently offers a luxury/super-premium furniture & home goods market of US$ 1.5 billion in Fiscal 2023 which includes sofas, chairs, dining tables, wardrobes, kitchens, home furnishings goods such as bath linens, kitchen, cushions & covers, bed linen, curtains, flooring & mattress, Home décor good such as table décor, tableware, spiritual & wall decors, Lighting (Includes lamps, wall lights, ceiling lights, smart lights, festive lights & LED lights) & others.

This market is poised to triple in the next four (4) years to reach US$ 4.8 billion. The luxury/super-premium furniture market in India is driven by the increasing affluence of consumers, global influences, integration of technology and the growing demand for sustainable furniture choices. These factors collectively contribute to the growth and dynamism of the luxury/super-premium furniture market in India, providing consumers with a wide range of options to create sophisticated living spaces.

INDIAN REAL ESTATE MARKET: A TAILWIND OPPORTUNITY

The real estate market in India is one of the fastest-growing segments. While China and the US experienced a significant dip due to high mortgage prices and unaffordability caused by COVID-19, India recovered from the fall in a very short span, much before the global economy. The rise in affordability has significantly impacted the residential real estate market, with Indian cities experiencing a continuous increase in the affordability ratio, which measures the income-to-cost ratio for purchasing residential properties. The pent-up demand among potential homebuyers also acted as a catalyst in the recovery of the Indian real estate market.

India is expected to witness an increase in the number of residential units sold/self-constructed, growing at a rate of 30% during the period Fiscal 2021 - 2023. As per Redseer estimates, India saw 5.1 million units sold or  self-constructed in Fiscal 2023. This growth represents a compound annual growth rate (CAGR) of around 30% following the post-COVID-19 period.

India has witnessed significant growth in residential properties, especially mid end, high end, and luxury/premium properties, which clearly indicates a higher demand for holistic living among buyers. Share of luxury/premium properties has increased from 1.7% of the total housing sales/construction to 2.8% from Fiscal 2019 to Fiscal 2023 with a growth rate of 22%.

STANLEY LIFESTYLES TOTAL ADDRESSABLE MARKET IN INDIA AND PRESENT CATEGORIES

In 2023, Stanley Lifestyles have an addressable market of approximately US$ 5.3 billion (₹423 billion), projected to grow to approximately US$ 10.5 billion (₹840 billion) by 2027. Their current suite of offerings focuses on the luxury furniture, home goods, and home interiors market in India. Within this market, the organized luxury segment, which includes sales through brick-and-mortar stores and online platforms, is experiencing significant growth. Growth in this segment is driven by factors such as rising nuclearization, increasing women's workforce, changing consumer preferences, higher disposable incomes, the influence of social media, rising housing projects, and the growth of the tourism and hospitality industry.

STANLEY LIFESTYLES LIMITED STRENGTHS

Their key competitive strengths include the following:

• 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

STANLEY LIFESTYLES LIMITED STRATEGIES

To leverage their strengths they intend to implement the following strategies to increase their competitiveness and market share:

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

STANLEY LIFESTYLES LIMITED RISK FACTORS & CONCERNS

1. The business is highly dependent on the sale of recliners and sofas.
2. They generate a substancial portion of their sales from their stores located in the states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana ("South Region").
3. They are reliant on their company owned company operated stores for a majority of their sales.
4. The business involves prolonged inventory days and extended cash conversion cycle.