ICU Eyewear Diversifies Its Manufacturing With The Help Of 1847 Holdings – Move Expected To Reduce Costs “Significantly”
NEW YORK, NY / ACCESSWIRE / April 11, 2024 / From investments to revenue generation, diversification is key to growing a business, and that seems to be true when it comes to ICU Eyewear Holdings Inc., a subsidiary of private equity holding firm 1847 Holdings LLC (AMEX:EFSH). The online purveyor of sunglasses, readers and anti-blue light glasses recently announced it has geographically diversified its manufacturing operations beyond mainland China to now include both the Philippines and a manufacturing partner in the U.S. That’s a big deal for ICU Eyewear. It not only gives it more manufacturing might, but the company reports it was able to negotiate favorable pricing with its existing and new manufacturing partners and eliminate certain tariffs, which it said should “significantly” reduce its cost of goods.
“ICU remains dedicated to enhancing the reliability and efficiency of its supply chain. Notably, we expect to benefit from a 25% savings on accessories, which represents 20% of ICU revenue, and a 10% savings on eyewear, which represents 80% of revenue,” said Christine Roach President & CFO of ICU Eyewear, in a statement. “Our new US manufacturing partner is planning to integrate advanced technology into its operations, which will allow ICU to benefit from cutting-edge manufacturing processes, thereby ensuring we continue to offer the absolute highest quality product to our customers.”
Big Name Customers On The Roster
ICU, which 1847 acquired for $4.5 million in February 2023, is a leading designer of over-the-counter (OTC) non-prescription reading glasses, sunglasses, blue light-blocking eyewear, sun readers and outdoor specialty sunglasses. Founded in 1956 and headquartered in Hollister, California, ICU reports it is the number one provider of OTC eyewear at Target Corp. and has a huge customer base of national, regional and specialty retailers. All told, ICU eyewear can be found in 7,500 retail locations across the country.
According to 1847, it is the only OTC eyewear supplier in the U.S. to have “meaningful penetration” in all the significant retail channels, including grocery, specialty, office supply, pharmacy and outdoor sports stores. In 2020, ICU formed its ICU Personal Care brand to serve the needs of existing and new customers for personal protective equipment (PPE) and related personal care categories. The company earned revenue of over $19 million in 2021, with gross margins of about 40% and adjusted EBITDA of $1.7 million. ICU has over ten brands and more than 3,000 SKUs across the reading glass, sunglass, and health and personal care segments.
“By diversifying manufacturing geographically, ICU has effectively reduced its reliance on production in China, lowered production costs and fortified its supply chain,” said 1847 Holdings CEO Ellery Roberts. “We have taken important steps to enhance ICU’s operations, which not only makes it more efficient but, potentially, a more attractive acquisition target.”
Positioning For A Spin Off?
It’s not surprising that 1847 acquired ICU Eyewear as it fits perfectly in the publicly traded diversified acquisition holding company’s portfolio. 1847 acquires small businesses with about $5 million of EBITDA and then deploys resources to strengthen the enterprise and improve operations. All that work can lead to a sale or IPO, often at a much higher valuation than 1847 paid. In other instances 1847 will hold on to the asset, contributing to the company’s ability to pay regular and special dividends to investors.
ICU is already garnering interest and could end up having a successful exit, similar to what happened with the IPO of 1847 Goedeker’s. In April 2019 1847 paid $6.5 million for the online purveyor of appliances, furniture and home goods. By June of 2021 when it went public, the company was valued at roughly $60 million. “It’s attracted some interest largely because ICU has done such a good job serving one of the largest retailers in the world, Target,” said Roberts. “That significant presence is incredibly attractive to strategic investors.”
Growing Markets
The market ICU is serving is large. After all, the nation is getting older, and the world’s population is increasingly dependent on their smartphones. As a result, demand for reading glasses can be expected to rise, along with ones that block out blue light, which studies have shown can be harmful to our eyesight. The global market for reading glasses was $41.1 billion in 2023 and is predicted to reach $64.1 billion by 2032, growing at a CAGR of 5.7%. The anti-blue light glasses market is also expected to grow as awareness about the harm blue light can cause increases. Meanwhile, the global sunglasses market is projected to grow at a CAGR of 5.6% from 2024 through 2030.
ICU Eyewear, with the help of 1847, is positioning itself to be a leader in the OTC glasses market and is already proving its mettle with its powerhouse customers. With leaner manufacturing and expansion plans underway, the company may become synonymous with specialty glasses in the months to come.
Featured photo by nacer eddine on Unsplash.
Contact:
Ellery Roberts
eroberts@1847holdings.com
SOURCE: 1847 Holdings LLC
View the original press release on accesswire.com
