Kurlon enters furniture, home linen categories
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Kurlon Enterprise Ltd, India’s largest mattress company, is expanding its product portfolio to include home furnishings to accelerate growth after focusing on its core mattress business for the past five decades.
The company has added products such as linens, pillows, blankets and living room and bedroom furniture, including wardrobes, beds, sofas and couches.
“Over the next two to three years, we aim to grow at 10-12%, which is two to three times the market growth rate. By this time, non-mattress business is expected to contribute about 30% of Kurlon’s revenue,” said Ravi Sahgal, executive vice-president.
Non-mattress business now accounts for just about 10% of the company’s revenue.
In the year ended 31 March, Kurlon’s revenue stood at around Rs.800 crore, Sahgal said. According to a report by credit rating agency Icra Ltd, Kurlon reported an operating income of Rs.698.76 crore and a profit of Rs.4.89 crore in the year ended March 2014, as against an operating income of Rs.727.75 crore and a profit after tax of Rs.0.04 crore in the previous year.
“Kurlon has a strong brand acceptance. Entry into new segments won’t be very tough. But it is late to the party. It should have tapped these segments long ago,” said an analyst with a global consulting firm, asking not to be named.
Over the next few years, Kurlon will increase retail presence in smaller towns with populations of about 25,000.
“We’ll tap modern retail and e-commerce in an aggressive way and will also focus on the super premium segment,” said Sahgal. Super premium mattresses, some of which cost more than Rs.1 lakh apiece, currently account for about 10% of Kurlon’s revenue.
E-commerce is the fastest-growing channel for Kurlon. Besides vending through online marketplaces such as Flipkart, Urban Ladder, Pepperfry and Snapdeal, the company also sells through its own website.
In October, Kurlon raised Rs.90 crore from Motilal Oswal Private Equity-managed India Business Excellence Fund, for an undisclosed stake, to support capacity addition, expand its distribution network and for marketing initiatives, according to a joint statement by Kurlon and Motilal Oswal.
Established in 1962, the company has a pan-India sales and distribution network supported by four centralized warehouses, 72 sales offices and more than 160 exclusive showrooms.
The firm works with more than 4,000 dealers and retailers. It has nine manufacturing facilities across Karnataka, Gujarat, Madhya Pradesh, Uttarkhand and Odisha.
The mattress market is mostly unorganized in India. Informal industry estimates indicate that the size of the market to be around Rs.5,000 crore. In the organized segment, Kurlon competes with brands such as Sleepwell, Springfit, King Koil and Godrej Interio.
Kurlon is spending heavily on advertising and promotions. This year, it increased expenditure on advertisements and promotions to about 10% of revenue, almost double its average spending during the past three years. “This will continue,” said Sahgal.