The Hindu Business Line : Bombay Dyeing plans own retail chain

BOMBAY Dyeing has decided to set up its own retail chain at a cost of over Rs 100 crore. It will have 70-odd company-owned outlets across the country over the next three years.

The textile company had missed out on the retail push over the past few years as it had banked heavily on its decades-old franchisees. At present Bombay Dyeing has over 450 franchisees and 30-odd wholesale distributors.

This is the first time that the textile major is getting into retailing end of the business on its own. The first Bombay Dyeing retail outlet is to be launched quite soon. Though there is no firm date that was available on the launch, it is expected to materialise in a matter of weeks.

The first set of these retail stores will be located in Mumbai and they could carry a new label, but very much under the umbrella of the Bombay Dyeing brand.

This is understood to be one part of the restructuring exercise under way at Bombay Dyeing. The other would include massive capital infusion to the tune of around Rs 400 crore where the textile house would go in for modernisation of its plant and machinery at its Worli unit.

Talking to Business Line, Mr Aloke Banerjee, Head, Domestic Business, Bombay Dyeing, admitted such a development. This was part of the group's efforts to consolidate and leverage its area of core strength - the home textile segment, he said.

"For the past few years Bombay Dyeing was not present in those localities and shopping malls where people were actually going. We aim to correct this imbalance with this push into retailing in a bid to leverage the tremendous brand loyalty that we enjoy. This initiative will get us into the happening locations in metros, mini-metros as well as the `A' and `B' category towns," Mr Banerjee said.

With the once renowned Bombay Dyeing ad campaigns once again coming into its own - the third campaign in the last 18 months is expected to get going on September 26 - the shift in the company strategy is evident. Gone are the days when the sales were pushed only by discounts.

"We have already quantified the incremental rise in sales after the last ad campaign at over 70 per cent. The latest ad will, for the first time, merge indoors and outdoors. And we have the ad spend at Rs 5 crore," Mr Banerjee said.

Clearly, the realisation that the real margins in the textile business lay with the trader has dawned on Bombay Dyeing. Given the opportunities that its exports division has coming its way in the post quota days, Bombay Dyeing feels the time has come to get its act together in the domestic side of the business as well.