Bangalore: Titan Industries Ltd’s youth fashion brand Fastrack—the company’s fastest growing business—expects sales to jump 28% to Rs.1,000 crore this year, helped by strong demand for new products such as handbags and wallets.
Fastrack sells watches, sunglasses, wallets and handbags mainly to 15-25 year-old people, and contributes about 10% of Titan’s overall business. The division expects to sell four million watches, at least one million sunglasses and nearly one million accessories such as handbags, belts and wallets, Fastrack head Ronnie Talati said in an interview.
Fastrack increased prices by 10-15% this year to shield margins due to higher input costs and a decline in the rupee. A fall in the rupee against the dollar hurts Titan as many of its materials are imported.
Talati said Fastrack will also launch a new, larger store format in January in Bangalore. The new store will start at 1,100 sq. ft and eventually increase to about 1,600 sq. ft. Fastrack’s current stores occupy between 700 sq. ft and 1,100 sq. ft.
“We’re launching a new retail identity—the look and feel of the new stores will be completely different from the current stores. And the focus will be on expanding the new stores,” Talati said.
Fastrack has 150 stores and expects to end the year with over 220 outlets. “Earlier, we had targeted close to 300 stores this year, but because of the (economic slowdown) and high rentals in some places, we had to recalibrate our expansion plan,” he said.
With people increasingly using mobile phones for checking time, Titan has invested heavily in marketing watches as lifestyle products to lure shoppers. The company, with its Sonata and Fastrack brands, accounts for a majority of watch sales in India, which is also considered an attractive market for international luxury watchmakers such as Tag Heuer, Swatch and Omega.
Fastrack, with its raunchy ads and focus on fashion, stands out in Bangalore-based Titan, which still gets a majority of its business from traditional products such as jewellery and gold watches. For instance, unlike for the rest of the company, Diwali is not a major selling time for Fastrack.
“Some of our ads can create a lot of controversy in a conservative company like Titan and within the Tata group. But being an irreverent brand, everyone’s begun to accept us within the group and Titan, and we’re run almost like a company within a company,” Talati said.
Talati, who was previously Titan’s finance chief, has headed Fastrack since 2005 when it was made into a separate division. Since then, sales of the brand have grown from under Rs.30 crore to Rs.780 crore last year.
“They’ve marketed Fastrack well. Their main jewellery business is seeing a volume slowdown because of higher prices, and Fastrack is one of the few Titan businesses that has very good growth prospects in terms of volumes,” said Vinay Kanth Raj, analyst at Karvy Stock Broking Ltd. “Growth (at Fastrack) will be strong for at least two to three years more.”
To increase growth, Talati said Fastrack may venture into international markets within a year or two. The company plans to grow aggressively in a single international market over a period of three years and only after establishing a large presence in that market will it look at more countries, Talati said.
“The pressure on us to go international is very high because there are a lot of people (potential franchisees) from various markets (such as Holland, New Zealand, Africa) approaching us with good offers. We want to do it in a careful, calibrated way, and go into maybe one market,” he said.