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Business News/ Industry / Retail/  Biyani’s Brand Factory speeds up expansion in bid to take on e-tailers
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Biyani’s Brand Factory speeds up expansion in bid to take on e-tailers

Renewed thrust comes after govt on 29 March allowed 100% FDI in online marketplaces but prohibited them from offering huge discounts

Brand Factory offers 200 brands, including Levis, Lee, Wrangler, Nike, Louis Phillipe, Allen Solly and Gini and Jony. The chain will offer 20-70% discount on all products throughout the year. Premium
Brand Factory offers 200 brands, including Levis, Lee, Wrangler, Nike, Louis Phillipe, Allen Solly and Gini and Jony. The chain will offer 20-70% discount on all products throughout the year.

Mumbai: Kishore Biyani-led Future Lifestyle and Fashion Ltd is speeding up expansion plans for its fashion discount chain Brand Factory, as it looks to take on online marketplace retailers like Snapdeal, Flipkart and Amazon.

The renewed thrust comes after the government on 29 March allowed 100% foreign direct investment in online marketplaces but prohibited from influencing product prices through huge discounts.

Brand Factory offers 200 brands, including Levis, Lee, Wrangler, Nike, Louis Phillipe, Allen Solly and Gini and Jony. The chain will offer 20-70% discount on all products throughout the year.

In March, the retail chain issued three-page jacket advertisements across India (except in Mumbai and Delhi) in The Times Of India playing on the names of e-tailers like Snapdeal, Flipkart and Amazon. The advertisement urged the consumers to “Flip the kart," “Amaze off," and “Snap the deal" for Brand Factory.

At the retail outlet, the company had people in costumes carrying similar placards and selfie booths that allowed consumers to click their pictures with props that said the same.

“The difference is that we are offering these discounts with Indian money whereas the online retailers are not," said Kishore Biyani, group chief executive officer of parent Future Group while pointing out to the fact that online marketplaces are not FDI-compliant.

The decade-old chain Brand Factory, which opened its first store in 2006, currently has 46 stores across 20 cities. It opened its first store in Mumbai on Tuesday and plans to have six stores in the city within a month. “In the next two years we will double our store count," said Suresh Sadhwani, head, Brand Factory.

The chain will end the financial year 2016 with a gross merchandise value (GMV) or value of goods sold at 4,000 crore. This is similar to e-tailer Myntra’s expected annualized gross sales for fiscal 2016 of around $600-650 million or 3,987.9 crore. However, unlike Myntra, which is still to make profits, Brand Factory is a profitable business, said Sadhwani.

The discount chain model used to be really big in the initial years of modern retail with companies like The Loot (India) Pvt. Ltd, which operates The LOOT outlets, Krishna Group’s The Grab Store, Prateek Apparels Pvt. Ltd’s Coupon, Arvind Mills Ltd’s Megamart, Vishal Megamart, the discount store chain of Vishal Retail Ltd, and Provogue (India) Ltd’s Promart.

However, over the years, most of these companies exited or shutdown. For instance, Coupons was acquired by Brand Factory and others like Megamart have repositioned themselves.

“At Brand Factory, we run a very tight ship with operations cost accounting for 12-14% of overall sales," said Biyani, explaining how the company has survived so far.

Also while most retailers took large debts and expanded fast, Brand Factory’s strategy gained scale in one geography before expanding to a new one. The company has so far been focused on cities like Hyderabad where it has 12 stores and Pune where there are six stores, said Biyani.

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Published: 12 Apr 2016, 05:08 PM IST
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