Apart from recouping of sales lost last year, price restructuring of existing brands, new eye care products and aggressive promotional schemes also helped sales growth. Finished goods purchases increased by 75 per cent from 0.4 crore to 0.7 crore. Other income grew by 233 per cent to Rs 2.3 crore mainly because of writing back of a liability of Rs 1.6 crore. Operating profit rose 123 per cent to Rs one crore. Net profit rose 314 per cent to Rs 0.4 crore.
Rayban, the largest selling sunglass in the world has a 50 per cent share of Indian market. Yet it has not been able to push sunglass sales in the premium segment eye care business since its inception in 1990. During this period, total market size has more than trebled but Rayban sales have failed to catch up.
The basic reason is that in India sunglass market is highly fragmented with a spectrum of pricing.
The company does not have any product in lower price segment that dominates the market. In premium segment products are more prone to the latest fashions and designs that can be accessed on the internet.
Rayban popularised the use of sunglasses but could not cash in on the leverage because of the duplicate manufactures in unorganised sector. According to one estimate duplicate products account for a bulk of the market. Import of cheap substitutes has also affected the companys products.
Rayban has upgraded the technology relating to manufacturing metallic fames and sunglasses.
The company also recently showcased its 160 models of Ray Ban sunglasses, including premium ones, which will enter the market shortly for the first time largely because of the initiative of its new owners, the Luxottica group.
Rayban is synonymous with quality eyewear, while Luxottica is committed to provide the Indian consumer with the same Ray Ban that is available to a consumer in Milan or New York.
Bausch & Lomb of the US had sold its sunglasses business in 1999-2000 under the Rayban brand to the Italian Luxottica group in 1999 for around $640 million. Bausch & Lomb, US had a 44 per cent stake in its Indian subsidiary through another subsidiary, Bausch & Lomb South Asia Holdings. Luxottica is a global leader in premium eyeglass frames and owns several well-known brands such as Giorgio Armani, Ferragamo and Vogue.
The acquirer, Luxottica ran into trouble when Sebi asked it to make an open offer to acquire an additional 20 per cent equity from the shareholders of Ray Ban Sun Optics and pay the penal interest at the rate of 15 per cent for delay in making the offer.
The price worked out to Rs 96.35 per share. Sebi has also directed Luxottica to pay interest at the rate of 15 per cent, calculated from August 27, 1999, till the date of payment and new offer price worked out to Rs 140 per share.