Picture this: your family's toothy grins flashing above the living room mantle. Portrait Innovations Holding can make that happen. Through operating subsidiary Portrait Innovations, Inc., the company operates more than 180 photography studios across the US and provides consumers with professional-quality family, group, and individual portraits in under two hours. Its freestanding studios are primarily located in outdoor shopping centers. Portrait Innovations markets its services through its own website and through an advertising agency, which targets various customer groups such as brides, business professionals, new mothers, and sports teams. The fast-growing company filed to go public in mid-2010.
Its $75 million initial public offering follows several years of steady sales growth and rapid organic expansion. Portrait Innovations opens an average of 30 new studio locations per year. It intends to open another 30 in fiscal 2010 and increase its studio base by about 20% annually thereafter. The company believes the US market is ripe to support more than 800 Portrait Innovations studios overall. Certain net proceeds from its IPO will be used to help fund its studio expansion efforts. Other proceeds will go towards repaying debt under its $8 million revolving credit facility.
Unlike many of its competitors, which house their studios within traditional indoor malls or department stores, Portrait Innovations chooses to lease studio locations primarily within open-air shopping centers, a strategy that aligns with a US consumer trend of shoppers preferring the convenience and accessibility of outdoor malls over indoor malls.
Substantially all of the company's revenue is derived from sales of its photographic portraits produced on-site using its digital imaging and printing equipment. To keep that revenue base growing, it is investing in faster digital imaging technologies and marketing via various advertising channels (including social media sites and TV) to drive customer traffic especially during non-holiday periods. Because it does not purchase paper and chemical printing supplies in advance of customer orders, the company believes it can achieve higher levels of profitability by keeping inventory costs low while maintaining that growing revenue base.
Directors Mike Balm and Thomas Henson each hold a roughly 40% stake in Portrait Innovations Holding. Together, they control the company through private investments funds, Emergo Alpha Fund and Southeastern Private Investment Fund IV. – less