Brand Factory plans aggressive expansion, to focus on small towns
Brand Factory is set to open 40 new stores over to next 8-10 months to reach the 100 mark, and will thereon add 40-50 outlets each year until it gets to 200, says business head Suresh Sadhwani
Bengaluru: Future Lifestyle Fashions Ltd’s discount chain Brand Factory is looking at aggressively expanding its store footprint and plans to focus on smaller towns and cities in particular as part of this strategy.
The retail chain, part of Kishore Biyani’s Future Group, is set to open 40 new stores to touch the 100-store mark over the next 8-10 months, said Suresh Sadhwani, business head of Brand Factory. From there on, the company will add 40-50 new stores each year until it gets to 200, Sadhwani added.
Brand Factory has been in existence for a decade and has 60 outlets currently, which means on average, it opened six new stores every year. The pace, which picked up to 10-15 new stores over the last year, is set to rise.
Brand Factory operates in a space over which it has a clear dominance, considering individual factory outlets are the only competition in the fashion discounting market, according to Ankur Bisen, senior vice-president at Technopak Advisors and another analyst who declined to be named. But to some extent, the analysts said, any retailer selling value fashion could be construed as competition.
“Last year, we did a free shopping weekend. A lot of customers came to know about Brand Factory (through that) and since then, growth has been fantastic. We were growing by 30-40% (revenue) before the event and suddenly growth went much higher,” Sadhwani said in a telephone interview.
People from smaller cities where Brand Factory does not have any outlets travelled to the closest stores for its free shopping festival last year, Sadhwani said. For instance, customers from Belgaum travelled to Bengaluru to shop at Brand Factory during the event.
The interest from smaller cities has prompted Brand Factory to look at opening additional Tier II stores. It has already signed deals to open stores in cities such as Surat, Gorakhpur, Baroda, Lucknow, Salem and Trichy.
Brand Factory’s free shopping weekend is a promotional event where the company offers customers steep discounts and gives them free merchandise, gift vouchers or cash back in its mobile wallet.
This year, the discount chain’s free shopping festival was held across the country between 22 and 26 November, and did business worth nearly Rs450 crore on a gross value basis.
“Overall, we are bullish about this (Brand Factory) model and I see no reason why this model should not grow,” said Bisen.
In 2016-17, Brand Factory clocked Rs1,045 crore in sales. The unit is the second-highest revenue earner in Future Group’s Future Lifestyle Fashions division, which includes other fashion chains like Central and Planet Sports.
Brand Factory stocks products across categories ranging from apparel to sportswear and accessories. A majority of its revenue comes from sales of men’s apparel, followed by apparel for women and children. It expects revenue contribution from the footwear category to grow much faster than the rest, Sadhwani said. Footwear currently accounts for 4% of the retailer’s total sales and is expected to double over the next two years.
“When online (boomed) one of the categories that was most affected across offline was footwear. It is easier to buy footwear online than apparel. But it is coming back big time in the past six-eight months and it looks like the next big category for us. We are banking on that heavily,” Sadhwani said.
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