UK footwear retailer Pavers eyes larger India presence
The prospect of selling more shoes in an emerging market of India’s size is driving international footwear retailers to this part of the globe. Some of them are inking joint venture agreements with leading retailers, such as Clark’s of the UK with the Future Group. Others, such as Crocs of the US, have already had a headstart by launching operations in the country a few years ago.
Some others are fine tuning their presence here in anticipation of the competition. Such as Pavers, a leading British footwear retailer. It has over 100 stores in England and Ireland. In India, where it has been present since 2008 via a joint venture with a UK-based shipping and oil drilling firm called Foresight, its footprint has been restricted to five franchisee stores and 90 department stores and multi-brand outlets.
This, says, Pavers’ managing director Stuart Paver, is hardly enough in a steadily growing market. The branded footwear market is estimated to be Rs 4,500 crore in size. It is growing at a steady 20 per cent yearly. This is tempting enough for both national and international majors to make a beeline. Existing domestic footwear firms such as Bata, Liberty, Relaxo and Metro, for instance, are expanding their network to take advantage of the boom.
Pavers, then, will have to act fast, says its MD, if it has to go anywhere in terms of matching the size and scale of operations of these companies.
“We will be adding another six franchisee stores in the next two months,” says Paver. “And, are contemplating to grow this model further. At the moment, we have tie-ups with three companies for franchisee operations - Triton Retail, RG Enterprises and Bansal Supermarket in Chennai, Bangalore and Delhi, respectively. These companies are willing to take their franchisee operations to allied parts of the country. That should help in our expansion drive in the future.”
Tags:pavers, clarks, crocs, Bata, liberty, relaxo, metro, franchisee stores, franchisee operations, franchise growth, franchise recruitment, footwear franchise,
Source:Business Standard, Viveat Susan Pinto, Mumbai May 10, 2010
Showing posts with label Bata. Show all posts
Showing posts with label Bata. Show all posts
Monday, May 10, 2010
Wednesday, February 24, 2010
Khadims Looks at being the No 2 organized footwear franchise retail brand.
KOLKATA: KM Khadim & Co Ltd was a nondescript footwear shop at Chitpur in Kolkata, one among the hundreds of outlets that dotted eastern India’s footwear factory when it was bought by Satya Prasad Roy Burman in 1965. The wholesaler blended with the multitude of unorganised players that dominate the city’s shoe industry, a trait its shares with the country’s footwear market, for many years.
But in 1993, Mr Roy Burman and son Siddhartha saw that the future was in retail and decided to make the leap. Backed by a formidable team of karigarhs (shoemakers) who deliver low-value products by the thousands, they first set up 3 stores in Kolkata. The move paid off.
Khadim’s — the moniker was retained as a tribute to its previous owner — is today the country’s third-largest organised footwear retailer. It is the top player in the east with a mushrooming empire of 499 retail stores across India. The company’s products go off the shelves off independent dealers as well.
The company also owns a 30,000 sq ft superstore, Khadim’s Khazana, near Kolkata that offers a scrum of products under one roof to people residing in the suburbs as well as two Sona Khazana stores, which marked its foray into the jewellery business.
Though it has a factory that makes wash-and-wear and premium leather footwear, Khadim’s’ success primarily rests on its outsourcing strengths. The company relies on over 200 third-party vendors spread across eastern India and northern leather product hubs such as Kanpur and Agra for sourcing material and finished footwear.
According to a rival company executive, Khadim’s hits the high spots on merchandise and pricing as well as distribution. Khadim’s specialises in affordable products, with prices starting at Rs 70. The wide variety of shoes in its portfolio includes footwear for men, sporty and sports shoes, comfort leather shoes, stilettos and fashion wear. Aggressive marketing has helped in a high brand recall among customers.
The efforts have helped Khadim’s to a turnover of Rs 200 crore in 2008-09 and an estimated Rs 240 crore this fiscal. “We’ve perfected our setup over the years,” says Siddhartha Roy Burman, managing director of Khadim’s.
There have been mistakes though, such as Egaro, Khadim’s lifestyle retail venture, where it burnt its fingers. Egaro was launched with much fanfare in 2007 with two sprawling stores but the plan folded due to high rentals and low footfalls.
“Each failure has been a learning experience,” says Siddhartha Burman. “We should have started small with Egaro as it was new to us. After all, we don’t have very deep pockets.”
Having learnt its lesson, Khadim’s plans to focus singularly on footwear retailing. The company owns only 70 stores while the rest are franchises, a status quo it wants to change. Plans are afoot to open up to 80 stores every year till 2013. “The aim is to ramp up its own stores to 150 and become a Rs 500-crore company by then,” says Siddhartha Burman.
The moves come as the footwear market is estimated to have grown to around Rs 12,000 crore with the entry of a raft of global players such as Skechers and Pavers, a far cry from the handful of companies present in the organised space at the time of Khadim’s entry.
But Khadim’s is unfazed by the changes. “We treat our franchise stores like our own. We share everything with them: our good practices, servicing, team management tips, even the salesman’s salary,” says Burman Junior.
Still, pressure from players in the unorganised segment is mounting as they become cost-competitive and tap into the rural market for growth. But Khadim’s believes it has swathes of customers who will not switch loyalties. “Total footfalls over our own stores and our franchisees is about 40,000 per day,” claims Mr Roy Burman.
The company is also trying to win over new customers through constant innovation. New products such as orthopaedic and anti-skid technology shoes have been launched in recent months. Khadim’s also tries and keeps abreast of the latest fashion trends and fits them into the portfolio.
The company is now taking a shot at surpassing Liberty Shoes, its closest rival, though Bata India is presently out of reach with its 1250-plus retail network. “We are right on track,” says Mr Roy Burman.
But in 1993, Mr Roy Burman and son Siddhartha saw that the future was in retail and decided to make the leap. Backed by a formidable team of karigarhs (shoemakers) who deliver low-value products by the thousands, they first set up 3 stores in Kolkata. The move paid off.
Khadim’s — the moniker was retained as a tribute to its previous owner — is today the country’s third-largest organised footwear retailer. It is the top player in the east with a mushrooming empire of 499 retail stores across India. The company’s products go off the shelves off independent dealers as well.
The company also owns a 30,000 sq ft superstore, Khadim’s Khazana, near Kolkata that offers a scrum of products under one roof to people residing in the suburbs as well as two Sona Khazana stores, which marked its foray into the jewellery business.
Though it has a factory that makes wash-and-wear and premium leather footwear, Khadim’s’ success primarily rests on its outsourcing strengths. The company relies on over 200 third-party vendors spread across eastern India and northern leather product hubs such as Kanpur and Agra for sourcing material and finished footwear.
According to a rival company executive, Khadim’s hits the high spots on merchandise and pricing as well as distribution. Khadim’s specialises in affordable products, with prices starting at Rs 70. The wide variety of shoes in its portfolio includes footwear for men, sporty and sports shoes, comfort leather shoes, stilettos and fashion wear. Aggressive marketing has helped in a high brand recall among customers.
The efforts have helped Khadim’s to a turnover of Rs 200 crore in 2008-09 and an estimated Rs 240 crore this fiscal. “We’ve perfected our setup over the years,” says Siddhartha Roy Burman, managing director of Khadim’s.
There have been mistakes though, such as Egaro, Khadim’s lifestyle retail venture, where it burnt its fingers. Egaro was launched with much fanfare in 2007 with two sprawling stores but the plan folded due to high rentals and low footfalls.
“Each failure has been a learning experience,” says Siddhartha Burman. “We should have started small with Egaro as it was new to us. After all, we don’t have very deep pockets.”
Having learnt its lesson, Khadim’s plans to focus singularly on footwear retailing. The company owns only 70 stores while the rest are franchises, a status quo it wants to change. Plans are afoot to open up to 80 stores every year till 2013. “The aim is to ramp up its own stores to 150 and become a Rs 500-crore company by then,” says Siddhartha Burman.
The moves come as the footwear market is estimated to have grown to around Rs 12,000 crore with the entry of a raft of global players such as Skechers and Pavers, a far cry from the handful of companies present in the organised space at the time of Khadim’s entry.
But Khadim’s is unfazed by the changes. “We treat our franchise stores like our own. We share everything with them: our good practices, servicing, team management tips, even the salesman’s salary,” says Burman Junior.
Still, pressure from players in the unorganised segment is mounting as they become cost-competitive and tap into the rural market for growth. But Khadim’s believes it has swathes of customers who will not switch loyalties. “Total footfalls over our own stores and our franchisees is about 40,000 per day,” claims Mr Roy Burman.
The company is also trying to win over new customers through constant innovation. New products such as orthopaedic and anti-skid technology shoes have been launched in recent months. Khadim’s also tries and keeps abreast of the latest fashion trends and fits them into the portfolio.
The company is now taking a shot at surpassing Liberty Shoes, its closest rival, though Bata India is presently out of reach with its 1250-plus retail network. “We are right on track,” says Mr Roy Burman.
Thursday, December 31, 2009
Franchising Poised To Explode In Small Format Retail In 2010
Mumbai: Even as retailers shelved their expansion plans last year and struggled to keep company-owned stores running, they figured out a way to multiply their stores and sustain business — through franchising.
Franchise India Holding Ltd, estimates a rise in the adoption of franchise model by small-format retail players in the country since the slowdown last year.
As per its estimates, 85% of all small-format retail business in India now operates on the franchise model.
“Earlier, only 50% of small-box retail companies in India operated through franchise model, while the rest is operated only through company owned stores. This is a very significant growth from what it used to be a year or two ago,” Gaurav Marya, president, Franchise India Holding said.
During the recession, most retailers were starved of capital for expansion. Franchising offered a model to sustain their business.
“That was when we saw the growth in retail and companies that were earlier not franchising started looking at the model,” Marya said.
Brands such as Koutons, Levis, Reebok and Adidas, which were traditionally not franchising, have lately started looking at the model.
So much so, the retail format ratio for most brands now stands at 80% dedicated to franchising and 20% for company run at strategic locations.
According to Franchise India, large-box retailers typically desist from taking the franchise route, although some, like Trent’s Westside chain, are franchised.
Videocon India, which runs two retail formats — Next (electronics chain) and Planet M (music and departmental chain) — is now starting to franchise Planet M, which was earlier being expanded through company-run stores.
Bata India, the largest retailer and manufacturer of footwear in the country with 1,200 stores, is starting its own franchise network to expand retail presence in a few months, Marcelo Villagran, managing director and chief executive officer of the company, had told DNA Money in October. Bata is looking at opening 60 flagship stores every year and tapping the franchise model will help the brand accelerate further in the market that is getting highly competitive.
Cookie Man, the retail chain store owned by Australian Foods Ltd, which runs over 50 stores across India, is looking at reaching a total of 250 stores through franchising in another 5-6 years.
“Not only does the franchisee bring in the capital, but also, the retailers are able to save 4-8% on the point of sales,” Marya of Franchise India said.
Currently, 45% of organised retail sales in India are through franchised outlets.
This is in line with the developed world countries like US and Europe, where these models are well incepted in the business world.
As per Franchise India estimates, the fashion retail industry in the country is pegged at $29 billion and growing at 12% per annum. India is now opening up as a competitive apparel retail market.
The market potential for footwear is 1.1 billion pairs and it is estimated to be a $2 billion sector.
The jewellery market is estimated at $9.7 billion, with gold contributing 98% to retailing. And the industry is touting retail franchising as the best mode of tapping the market’s potential.
Source:Shailaja Sharma / DNA
Friday, January 1, 2010 2:17 IST
Franchise India Holding Ltd, estimates a rise in the adoption of franchise model by small-format retail players in the country since the slowdown last year.
As per its estimates, 85% of all small-format retail business in India now operates on the franchise model.
“Earlier, only 50% of small-box retail companies in India operated through franchise model, while the rest is operated only through company owned stores. This is a very significant growth from what it used to be a year or two ago,” Gaurav Marya, president, Franchise India Holding said.
During the recession, most retailers were starved of capital for expansion. Franchising offered a model to sustain their business.
“That was when we saw the growth in retail and companies that were earlier not franchising started looking at the model,” Marya said.
Brands such as Koutons, Levis, Reebok and Adidas, which were traditionally not franchising, have lately started looking at the model.
So much so, the retail format ratio for most brands now stands at 80% dedicated to franchising and 20% for company run at strategic locations.
According to Franchise India, large-box retailers typically desist from taking the franchise route, although some, like Trent’s Westside chain, are franchised.
Videocon India, which runs two retail formats — Next (electronics chain) and Planet M (music and departmental chain) — is now starting to franchise Planet M, which was earlier being expanded through company-run stores.
Bata India, the largest retailer and manufacturer of footwear in the country with 1,200 stores, is starting its own franchise network to expand retail presence in a few months, Marcelo Villagran, managing director and chief executive officer of the company, had told DNA Money in October. Bata is looking at opening 60 flagship stores every year and tapping the franchise model will help the brand accelerate further in the market that is getting highly competitive.
Cookie Man, the retail chain store owned by Australian Foods Ltd, which runs over 50 stores across India, is looking at reaching a total of 250 stores through franchising in another 5-6 years.
“Not only does the franchisee bring in the capital, but also, the retailers are able to save 4-8% on the point of sales,” Marya of Franchise India said.
Currently, 45% of organised retail sales in India are through franchised outlets.
This is in line with the developed world countries like US and Europe, where these models are well incepted in the business world.
As per Franchise India estimates, the fashion retail industry in the country is pegged at $29 billion and growing at 12% per annum. India is now opening up as a competitive apparel retail market.
The market potential for footwear is 1.1 billion pairs and it is estimated to be a $2 billion sector.
The jewellery market is estimated at $9.7 billion, with gold contributing 98% to retailing. And the industry is touting retail franchising as the best mode of tapping the market’s potential.
Source:Shailaja Sharma / DNA
Friday, January 1, 2010 2:17 IST
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