Raymond recently launched its 50th custom tailoring hub franchise in Cuttack. In view of this milestone, Ajit Pattnaik, General Manager and Head-Tailoring, Raymond, highlights the achievements as well as the benefits and business model which makes the tailoring hub franchise a fruitful venture
What was the objective behind Raymond’s custom tailoring hub initiative?
Could you highlight some of the achievements in this project?
We launched our 50th tailoring hub franchise in Cuttack – the first one in Odisha – on March 26, 2019. It’s a medium-sized hub with 44 machines and a staff of 35 members. We consider this a landmark event. In fact, through our tailoring hubs we have created capacity of converting 1.9 million metres fabric into customised garments annually. In addition, we are generating excellent employment opportunities through our hubs as we have over 900 men and women employed in this segment. Further, 40% of our tailoring hubs are owned by women entrepreneurs.
What are the franchise selection criteria?
The Raymond tailoring hub franchisees are mostly already associated with the brand in one way or another. Most of them are either Raymond shop owners or are associated with the brand as multi-brand outlets (MBOs), tag dealers or master tailors. As selection criteria, we check financial strength, overall experience in the trade as well as the candidate’s association with Raymond. We currently have four models for the tailoring hub: small, medium, large and extra-large. While the minimum area required is 1,000 sq. feet, the investment varies from Rs 15 lakhs for a small hub to up to Rs 60 lakhs for an extra-large hub for infrastructure and equipment.
What are the benefits for the Raymond custom tailoring hub franchise?
A small tailoring hub has a capacity of manufacturing 25 shirts, 25 trousers and five jackets per day. For that the total manpower required will be 26, including tailors, master tailors, support staff, security and accounts with an average salary of Rs 12,500 per person per month. The small hub can easily make revenues of Rs 96 lakhs in the first year itself with total expenses not exceeding Rs 75 lakhs. Hence, the gross profit will be Rs 21 lakhs which accounts for 22% gross margins. Thus, the return on investment works out to be 72% and the payback period is roughly 18 months on 100% capacity utilisation. Besides, we complement the franchise with best-in-class training for tailors and master tailors as well as the latest style advisories.
What are your expansion plans?
We are targeting 75 tailoring hubs by March 2020. However, looking at the overwhelming response we have received I am confident that we will exceed our targets.
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