In conversation with Vijay Kapoor, MD, Derby Clothing Pvt. Ltd, who spoke enthusiastically about his brand’s expansion plan in the coming time.
On its way to craft a global impact by creating around 1000 first generation entrepreneurs through franchisees, Chennai based Derby Jeans, the community-based denim brand in India is eyeing major retail expansion in the country and overseas markets. In the current fiscal year, the brand is planning to launch 41 stores in Kerala, Tamil Nadu, Andhra Pradesh and Karnataka market. Overall by 2025, it is planning to have around 600 stores across tier II and III cities and the rest 400 stores across all the fashion capitals of the world namely New York, Melbourne, Milan, Shanghai and Tokyo among others. Also apart from launching a global e-commerce portal, the brand will be introducing its own undergarment collection by 2020. Thus, briefly talking about brands future strategies Vijay Kapoor, MD, Derby Clothing Pvt. Ltd. spoke to Franchiseindia.com.
What is your vision of creating first generation entrepreneurs through franchisees?
The vision of the brand is to create 1000 successful first generation entrepreneurs through franchisees globally by 31st March 2025, thereby putting India on the global fashion map. We have been very clear that we will create a business that can be replicated and can be duplicated over different geographies. It is not just about opening stores or more business, but it’s about how successful the business is and its franchisee partners are. I am a first generation entrepreneur coming from a middle-class family so I understand the try being and struggle ahead to actually establish the brand.
We handhold franchisee partners, we teach them how to look at balance sheet, how to look at PNL, how to work out SOPs, how we can be profitable and how can we look at the business.
Why do you require only first generation entrepreneurs?
Our franchise partners will be able to recover their entire investment in 18-24 months including the security deposits, interior cost, and franchise deposit. This is the kind of ROI which is available and that is why we require first generation entrepreneurs who are basically youngsters hungry for success. We don’t have fall back option. We strongly believe that world judges a book by its cover, so we have to be well dressed which further means have to be confident. We are among the few community-based brands in the world.
What is the average amount of investment per store?
For a 500-600 sq ft exclusive store typically the investment is between Rs.20-25 lakhs.
What are your future retail expansion plans?
Right now all our stores are clustered in southern market. This fiscal year too, we are targeting Kerala, Tamil Nadu, Andhra Pradesh and Karnataka market. We will be adding another 41 stores by 31st March 2019 - taking the total count to 111. Further, we estimate that we will be able to successfully open about 600 stores nationally across metros to tier II to tier III cities. The rest 400 stores will be spread across all fashion capitals of the world namely New York, Melbourne, Milan, Shanghai and Tokyo among others. With this move, we are trying to create a global platform and trying to position Derby Jeans as a niche brand. Today a consumer is willing to pay for a niche brand. We do a lot of exports to Australia and GCC too.
Our entire retail strategy is consumer-centric. The mission of the brand is to have people first approach by creating a successful chain of customers, suppliers, vendors, job workers, franchise partners and back-end team members.
What is your take on Indian e-commerce?
E-commerce platforms in India are still in immature stage and bleeding heavily. I am not happy doing e-commerce in the Indian market though we have a very strong e-commerce presence. Close to 8 percent of our revenue comes from e-commerce, but we are not profitable out there. Most of the profit is drained through discounting that Amazon, Flipkart, Myntra and others do. They are the brand killers and not brand makers. We are also creating a global e-commerce platform minus India.
Are you planning to venture into new product portfolio?
We have very strong positioning in the shirts, trousers, jeans, and t-shirts. By 2020 we will have a full-fledged undergarment business which has a huge potential with not many strong undergarment brands operating in the segment, thus we want to capture that share. Therefore, exploring women space will be an eventual expansion. It will be the national extension that will happen from men to women to kids. But right now we want to consolidate into men’s space, get to the leadership position, become the global brand and then naturally expand.
Like the international ones why domestic denim brands are unable to create impact in the market?
Fortunately and unfortunately we are selling western products. We look at the world with aspiration so the consumer curve towards western brands will always be there. At Derby Jeans community we strongly believe that we have the capability to create a global brand. India is not known for fashion and we have taken the personal responsibility that we will carry the mandate forward and create a global denim brand from India while ensuring success.
What is your YOY growth?
We are a profitable organization. YOY we are growing by 35-40% and also ensure that we make 15% net profit after tax. We will definitely be going for funding and IPO which will happen in over the next few years.