With business expansion in mind, Bombay Dyeing is focusing on increasing its franchise store count from 200 to 500 over the next four years.
Reinventing itself to be the young and dynamic brand, Bombay Dyeing is focusing on increasing its franchise store count from 200 to 500. In an interview, Nagesh Rajanna, CEO - Retail, Bombay Dyeing, talks about his expectations from the GST Bill and the company’s future plans.
How significant is the franchising business for you?
It is one of the strategic priorities for us. Since the customer base is large, we alone can’t increase the brand penetration. We need entrepreneurs in creating the movement. The consumers and trading community pay a huge respect to our brand. They want us to expand the franchisee stores. The franchisee model will be a prime customer acquisition route for us. Franchising is a long-term suitable distribution footprint for us.
Are you consolidating your business?
As part of our vision 2020, we are doing couple of changes. First, we are no longer a manufacturer, we are a retailer now. It means that our manufacturing facility is shut and sold. This planning was there in the pipeline for sometimes. Second, we are reinventing ourselves to be a young and dynamic brand with the refreshing look, investing aggressively, expanding our customer base, and scaling up distribution footprint. We want to be a customer-centric organization. We have created two in-house studios, which have two distinct identities. One will take care of traditional and classic products, and other of millennial, youth and super rich.
What business format suits the most?
The franchisee format suits us the most. Currently, we have 30 company-owned stores and 200 franchise stores across India. Over the next four years, we will be increasing our franchise stores to 500. We are looking at all the tier-II & III towns above 1 lakh population.
Our franchisee model will consist of master franchisees at a state level, franchisees at a city level. This will be the FOFO model with standard operating processes from our end. Each of these stores will have an investment of Rs 50-60 lakh. We are targeting 30 per cent CAGR.
Please comment on demonetization and the introduction of GST
Our November revenue got impacted because of demonetization, but it bounced back in December and the trend in early-January is also positive. We will have to wait and watch for the next 40-odd days.
There is no clarity on the GST timeline. The GST Bill is encouraging for us as different states have different sales tax structure. We believe that textile is the priority sector for the Indian consumers and the government. Hence, we are expecting the textile retailing to be at the lower range of the GST table.