GKB Mulls Initial Public Offer To Drive Retail Expansion

Kolkata, Nov 17: | Updated: Nov 18 2003, 05:30am hrs
GKB Rx Lens Pvt Ltd, the company behind the GKB Opticals brand, is considering an initial public offering to power an ambitious retail expansion plan, according to Lalit Gupta, marketing director of the company.

We have not yet decided on a public issue, but we would like to do it, Mr Gupta said. The public issue would be mainly for the expansion.

At present, GKB has around 15 retail outlets selling spectacles and contact lenses. The company aims to add five outlets every year, even without the public issue.

Mr Gupta, who is from the second generation of the family that founded the business, said GKB has already joined hands with some of the worlds biggest brands in optical products, from lenses to frames.

GKB is aiming for a turnover of Rs 40 crore in the current year, having posted Rs 32 crore in the year to March 31, 2003. At present, GKBs domestic retail business accounts for around 25 per cent of its turnover, domestic wholesale around 45 per cent and exports the rest.

Mr Gupta said the company is aiming to increase turnover by 20-25 per cent, by growing the business of each segment.

On the operations side, GKB has taken the help of PriceWaterhouseCoopers to install an enterprise resource planning (ERP) system. The Rs 80-lakh project will use Microsofts Navision software to link up GKB outlets and factories across the country.

Within three months, we will have integrated all manufacturing, retail and sales operations on a central server here, Mr Gupta said.

Behind the facade of its stylish outlets, GKB runs a vast manufacturing business that supplies opticians the prescription lenses required by their customers.

GKB grinds the lenses to specifications from blanks that it imports. At present, it also makes a wide range of plastic lenses.

We have factories in every major city, Mr Gupta said. In India, the organised sector for such lenses is worth Rs 100-150 crore, while the unorganised market is larger, around Rs 350 crore, meeting demand mainly in rural India and small towns.

Mr Gupta said good eye-care is a function of not just quality lenses but also the cosmetic factor. For example, a thinner, lighter and clearer lens can double the cosmetic gain, he said.

If somebody doesnt like to wear spectacles, they keep it away and there is a loss of vision. In order to make to them like to wear glasses, the cosmetic reason is very important, he said.

Interestingly, the high-profile retail business provides the same margins as the wholesale business, since it also has high overheads, Mr Gupta said.