Mumbai: KDDL Ltd, formerly known as Kamla Dials and Devices Ltd, is considering selling a stake in its Swiss watch retail chain Ethos to private equity investors or high net worth individuals to raise funds to expand its business.
“We are in discussions with institutional investors and high net worth individuals who know the segment,” said Yasho Saboo, chief executive officer of Ethos. The retail chain requires $5 million (around Rs 25 crore) in investment and is interested in a long-term partnership of seven to eight years, said Saboo.
The premium to luxury watch retail chain is also introducing a new retail format called Our hub that will cater to entry-level watches between Rs 5,000 to Rs 20,000 to target the youth. “Most of our future expansion will be under Our hub,” said Saboo.
Ethos has 29 stores spread across nine cities and plans to open some 15 stores every year for the next three years. The retail chain is targeting revenue growth of 35-40% this fiscal from Rs 100 crore in year ended 31 March. The chain will soon be profitable, said Saboo.
Internationally, watch retail outlets are located within departmental stores and brands such as Rolex, TAG Heuer are well known. “Ethos has done quite well in making watch retail, an unusual concept into a destination. They have also succeeded in upgrading the market from utility and mass to premium,” said Raghav Gupta, principal, Booz and Co. (India) Pvt. Ltd, a consulting firm.
The timewear industry size is estimated to be Rs 4,000-4,200 crore, according to an All India Federation of Horological Industries report on the industry. The mid and premium segments account for more than half the sales at Rs 2,500 crore and is growing at a faster pace than the mass segment.
Earlier this year, Titan Industries Ltd started expanding its premium multi-brand watch retail chain Helios, after testing the market for two years. Helios, a mid premium to accessible luxury watches retail chain, stocks watch brands including Fossil, TAG Heuer, FCUK and Citizen that cost more than Rs 5,000 each. It has 17 stores and plans to open an additional 100 in the next three years.
“We are placing a bet on this segment to grow three to fourfold in the next three to four years from Rs 1,000 crore odd now,” said Ajoy Chawla, vice-president, Titan Industries.