Leather brands have grown their portfolio, which has opened doors for investors to partner with the leading players in this niche segment.
Leather industry has seen brand extensions such as footwear, apparels and other accessories like bags, belts and watches that equally appeal to consumer base. Leather exports are expected to grow at 25 per cent per annum over the next five years. The Department of Industrial Policy & Promotion (DIPP) is actively supporting the cause of promoting leather industry. Leather industry in India is being ruled by established players. All these are good enough reasons for investors to reap the maximum returns from this sector.
Hidesign took to franchise route to expand the brand in the tier- II cities by opening stores in leading malls and selected high streets. “We plan to open six new outlets at airports in the next two months, the first one being at the T3 terminal of the Delhi airport. We are also looking at opening three new stores in Delhi and three new in Kolkata,” says Dilip Kapur, President, Hidesign.
Woodland plans to open about 50 stores in this calendar year that will be a balanced combination of company-owned and franchise stores. “While franchise network is a quick route to grow, we plan to ensure that we partner with the right and like-minded partners and thus, take a steady approach to grow. Our retail network is well-spread across the country and we intend to grow across,” says Harkirat Singh, Managing Director, Woodland.
Leather brands are robust on international growth owing to an ecologically conscious and a sophisticated consumer market there. Hidesign aims to triple its revenue by 2021 by setting units outside India. The company reported revenue of Rs 100 crore and a profit of Rs 2.4 crore in the financial year 2016. Last year, the company also expanded into six new markets, including Kenya, Saudi Arabia and Canada. The company is also aiming at doubling its international business, which currently accounts for 20% of the revenue.
The government is also taking initiatives to help leather brands grow abroad. Harkirat Singh explains, “The DIPP is interacting with the private players in the leather industry to finalise the scheme put forth by the government, wherein brands would be able to access overseas markets through global exhibitions and trade fairs, without having to set their own individual offices abroad. Its time, India should become an exporter of brands, the way China is pushing its brands and not just supply material in the leather sector.”
Online route to growth
Franchisors consider e-commerce an equally viable option for growth, as it helps to meet real estate challenge and at the same time renders an opportunity to entrepreneurs to partner with the brand. Woodland is known for maintaining separate stock keeping units to ensure that brick and mortar stores and online channel do not affect product sales via different channels. Dilip Kapur says, “Strength of a brand is to ensure that all major e-commerce players consider Hidesign important for the business. We ensure that they offer us full experience of the brand through shop-in-shop with all the brand values and stories coming through strongly. Finally, our own website ensures that the full story of the brand is represented the way we wanted.”