It is no surprise that the owners of Spectacle Hut have a pretty clear vision of where the chain is headed, but even they never foresaw some early challenges that nearly derailed the eyewear company.
Problems with supply, aggressive rivals and the recession all posed serious risks during its difficult start-up period, but founders Gary Khoo and wife Sara Hay had the perseverance and business sense to prevail.
Spectacle Hut, including its subsidiary brands, now has 43 shops islandwide and raked in about $40 million in revenue last year.
An impressive record, given it began with a shop in Clementi in January 1997, restricted by limited funds for extra staff.
Mr Khoo and Ms Hay, both Singaporeans with optometry degrees from Britain, started their shop with their savings and loans. “Business was brisk, and we had no time for meals,” recalled Mr Khoo during an interview at one of the chain’s two boutiques in the Marina Bay Sands. “It was pure hard work, as we worked daily from 10am to 11pm, seven days a week, with no budget for staffing for a year.”
More trials came in 1999, when the couple realised just how cut-throat the industry could be.
When Spectacle Hut managing director Gary Khoo and wife Sara Hay started the business, they worked daily with no staffing budget, and weathered trials like Sars, ruthless competitors and a supply crisis to build the company into a chain with 43 shops islandwide.
Some larger chain stores, worried about the young upstart’s growth, banded together to pressure suppliers to stop selling stocks to Spectacle Hut.
The chain stores had a significant market share and enough muscle to force some suppliers to give in.
Said Mr Khoo: “Overnight, we were suddenly left without stock to sell. We had to cancel orders that had already been placed and refund customers’ deposits.”
A possible solution was to look overseas, so he knocked on the doors of the headquarters of some large suppliers.
He found favour with many who empathised with him, and they agreed to supply directly to Spectacle Hut, bypassing the middlemen.
That proved to benefit the budding chain hugely, as it secured goods at a much lower price.
But the catch was that the suppliers asked for large orders, to justify their gamble on such a new operation.
That gave Spectacle Hut a fresh problem – although it had expanded to three shops by then, it would still take a long time to sell off all the stock it had to buy.
While other companies might have crumbled under the pressure, Spectacle Hut instead decided to grab the bull by the horns and undertake a rapid expansion programme by opening new shops.
Within three years of the supply crisis, it had 12 shops. Its fast growth propelled the company into the big league of Singapore’s optical retail industry.
The company showed a similar steady hand when other troubles came its way, including the 2003 severe acute respiratory syndrome crisis, when sales plunged.
It had to work extra hard, and called up regular customers to offer more services to increase sales.
Another problem lies in the difficulty in finding skilled staff like optometrists. Although some local institutions offer diplomas and degrees in the field, there is still a shortage of talent, Mr Khoo reckons, and they command high wages.
Through it all, he has learnt to be philosophical about troubles in business and in life. He said: “In fact, almost every week we had good news and bad news, but we learnt not to worry.
“We learnt to take one day at a time, sleep well and wake up the next day recharged to solve each problem. Without sleep and a sense of well being, we won’t have the energy to think well nor the stamina to continue.”
Mr Khoo and Ms Hay have even resumed good relationships with the competitors that almost drove the company out of business in its early days. “We call ourselves friendly competitors,” he said.
Spectacle Hut offers a wide selection of eyewear products, and tries to bring in new ranges quickly. It also sources for products at optical fairs, including those in Milan and Paris.
It has undoubtedly been helped by the bad eyesight of Singaporeans: About 80 per cent of people over 18 are short-sighted, one of the world’s highest myopia rates.
In 2008, Spectacle Hut received a grant from Spring Singapore to upgrade its point of sales system, which will improve its stock management. The $125,000 grant was given under Spring’s Technology Innovation Programme. Said Mr Khoo: “It helped us to work more systematically, reducing human error and increasing our productivity. Less manual counting and checking is required.”
Last month, the company also used the system to implement a fingerprint login system to simplify the tracking of staff attendance and punctuality, and in so doing help quantify staff productivity.
Its aggressive programme of store openings has delivered annual growth of about 20 per cent for the last five years.
But the company will slow the expansion a little, having achieved a “reasonable spread of locations”, and growth could decrease to between 10 per cent and 15 per cent per year.
It also has some outlets in Beijing and Kuala Lumpur, and Mr Khoo said there is further potential overseas. “We are studying our options.”
Spectacle Hut’s strong growth reflects the expanding retail sector.
Excluding the sale of motor vehicles and motorcycles, and sales at petrol stations, the sector generated $23.8 billion in operating receipts in 2009, according to the Singapore Department of Statistics.
The sector employed about 99,000 workers – up by about 2,000 from 2008.
Ms Kee Ai Nah, Spring Singapore’s group director for industry development, said creativity and innovation are essential for renewing consumer interest.
“Besides carving niches for their stores, business owners constantly need to reinvent themselves with new products, promotions, concepts and even business models in order to stay relevant,” she added.
Singapore retailers have become savvier in developing fresh concepts, due to exposure to new ideas overseas, she noted.
Eyeing a wide range of customers
EYEWEAR chain Spectacle Hut started in January 1997 in a Clementi shop.
Founders Gary Khoo and wife Sara Hay started the firm when they were in their 20s with some savings and loans.
They have expanded the firm to 43 shops islandwide, including under subsidiary brands, making it one of the largest optical retailers here.
The main Spectacle Hut brand has 32 stores, targeting mid- to upmarket shoppers and carrying brands such as Cartier, Chanel, Gucci, Prada, Marc Jacobs and Giorgio Armani.
The other 11 stores are spread out between the two other brands under the firm – Eye Bejewelled and BlueEyes. Eye Bejewelled targets the same customer sector as Spectacle Hut.
The BlueEyes brand is less upmarket, catering to the middle to low-end buyers with brands such as Emporio Armani, Miu Miu and Marc by Marc Jacobs.
The firm also has shops in Beijing and Kuala Lumpur.
Revenue grew about 20 per cent a year for the past five years; turnover was about $40 million last year.
The company has about 180 employees in total.
Mr Khoo, 42, and Ms Hay, 39, have four children, all in primary school.