A story which started off as a departmental store now caters to a very niche segment of society. D’mart has come a long way in these two decades. K V Rao, Chairman, Dolphin Group of Companies shares his story and future plans in an interaction with Gunjan Piplani.
Gunjan Piplani (GP): Give our readers a brief about D’mart.
K V Rao (KVR): D’mart was incepted as a departmental store in 1992. We were the first departmental store in India. It was 3 floored and fully air conditioned store offering different categories at each floor. At that time we had footfall of 300-500. We ran it for eight – nine years but we couldn’t break even. So the concept failed as we think it was a premature birth. Then we moved on from it and fortunately in 1996 government loosened the import and export policy. So we thought of doing something with imports.
When the trade opened we started looking for people who want to export goods to India. We travelled to far-east countries including Thailand, Hong Kong and Singapore. Once the things took pace, we changed ourselves from a departmental store to a specialty store and then to luxury store. The final transformation happened in 1998 into a lifestyle luxury store, D’mart Exclusif.
GP: What is the USP of D’mart?
KVR: The products available at our store are not available elsewhere in the country or probably world. In terms of luxury, people purchase a product only if its exclusive, one of its kind for their household. For such products we have tied up with designer houses which have the passion of creating exclusive pieces which will only be for D’mart. Moreover, we are bringing the customers exclusive pieces to their doorstep.
GP: How many designer houses you work with?
KVR: 82 designer stores in six years and now we have close to 90 designers who are sourcing for us.
GP: So who are your clients?
We cater to the top of the list people including bollywood personalities, politicians and socialites. We also do corporate gifting.
GP: What all product categories is D’mart into?
KVR: We have limited edition pieces for home décor, then we are in to corporate gifting which requires a certain number of pieces and we are also into high end furniture. So we are complete solution providers for décor. Moreover, we also have a team of interior designers who can give suggestion as well.
GP: How did you change your strategies when you shifted your base from a very everyday product centric store to very niche segment?
KVR: To work on such product you need to have passion. We had a passion for these products. These operations had higher costs but also higher margins. We had to change the complete way of working from stores to personnel and scale of operation. The change happened by default, nothing was done in a defined manner.
GP: Elaborate on D’mart’s retail presence and expansion plan of the same.
KVR: We are growing rapidly in terms of product range and network. Retail we have 3 models, one being company owned showrooms which are seven in number, then about three franchised D’mart showroom and then there is a shop in shop concept franchisee which is seven to eight. We plan to grow the number by adding five or six more in this year.
We are also looking at network of 60 dealers for corporate gifting and we will be working extensively on our stocks so that we can feed the market properly. We are aiming this keeping in mind the festive season round the corner. In total we want to add 80-85 stores.
GP: What is the average size of stores for all the three models?
KVR: The company owned stores are 2000 sq ft in size, while franchised store starts from 1600 sq ft and the shop in shops are 500-700 sq ft.
GP: What investment does it require to set up a D’mart store?
KVR: For our three different store concepts the investment to be made is different. For standalone franchised store its about Rs 1 crore where we also participate. For shop in shop franchisee is Rs 20-30 lacs and for standalone company owned store its Rs 2.5 crore.
GP: What are your regions you are strong in?
KVR: We are strong in Delhi as it caters to all the NCR, UP and Punjab belt. We are strong in South as well as most of the metros are there.
GP: What is the price range of D’mart products?
KVR: Our product’s price range is divided into three. For corporate gifting, range starts at Rs 800 onwards, while exclusive products Rs 10,000 – Rs 6,50,000. For furniture, the price range is Rs 16,000 – Rs 20-25 lacs.
GP: What new product category we see coming? What are the investment plans?
KVR: We plan to enter the arena of door knobs. Then the product category is never ending. For investment, in the financial year 2012-13 the additional investment will be made in stocks, infrastructure and retail and it is about Rs 12-13 crore.