While continuing with its focus on offline market, Spykar has chalked out exciting store expansion plans through franchising. Furthermore, revealing the expansion strategies, Sanjay Vakharia, Director Marketing, Spykar, spoke to Indianretailer.
Tell us about your expansion plans ahead?
We are putting forth a lot of interesting concepts in the next couple of years and from the next season onwards.
By 2016, we are planning to open 60 stores across the country through franchising. Around 80 per cent of these stores will be opened in Tier II, III and IV cities, while remaining 20 per cent will be in Metros and Tier I cities. For per store franchisee will invest the capex of Rs 35 to Rs 50 lakh.
By 2020, we are planning to reach all the 300 cities with our own stores. There is much bigger India in India than what we see. As early as seven years back, we were the first brand in the country to move to Tier III and IV towns.
Currently, we are supplying to 1,100 MBOs in 300+ towns and 200 EBOs in all the leading LFOs across the country. We have these 200 stores in 110 towns hence; we still have 190 towns to open our own stores.
Any plans of expanding online?
In India, online is a huge age of discounting and it will go away soon. We don’t believe on discounting. We will rather have a great product and compel the consumers to buy online for convenient sake rather than discount sake.
We are putting lot of efforts towards omni-retailing. We are creating our infrastructure surrounding our 200 stores for consumers to see our collection online and pick it up from offline stores.
What is the ratio of your offline and online sales?
Out of the brands total sale, 94 per cent comes from offline stores and the rest 6 per cent comes from online. Entire online sale is only 8 per cent in the US.
Online is just a convenience seeking and a fun of buying. Online is just a game of discounting. Online companies are luring consumers with discounts. Online cannot disturb the business it has to be the part of the business. Finally, entire online network has to have a mutual benefit, it cannot be at the cost of the other guy. Compared to online, offline retail is going to be there forever.
Among top 10 online retailers in the US, 9 are offline retailers with their online presence. Number 1 is Amazon.
Are you planning to venture into new categories?
We are looking at expanding the women’s denim range by 2017. Simultaneously in men’s we are looking at sport wear.
By 2017, we are targeting our 30 per cent business to come from women’s wear. Presently, 12 per cent of our sale comes from women’s wear.
India is a market of entrepreneurs, it was never a market of formals, so there are a lot of casual elements in the dressing of Indians as such and we are very much geared up to explore this potential. In terms of Indian women, they will never consume Western wear more than 30 per cent of their total wardrobes.
How is Spykar factoring on demographic dividend?
We have not even touched 10 per cent of the potential population. There is rising propensity in young people to pay with rising disposable income. There is a lot more to do, thus Spykar will grow only when the country will grow. Still, there are large numbers of cities to be tapped and explore growth within these cities.
What is your earning target?
We are targeting to earn Rs 255 cr by March 2016, while ambitiously chasing to have the turnover of Rs 1,000 cr by 2020. Our present turnover is Rs 200cr and till 2018 aiming to grow by 30 per cent annually.