Lifestyle retailer Chumbak plans to use the $20-million that it will raise from investors to enter the US market.

The Bengaluru-based company, which is in the process of tying up the funds as part of its Series C funding, is currently doing market research to figure out the right size and location of its stores in the overseas market.

Vivek Prabhakar, CEO, Chumbak, told BusinessLine that, “We are planning standalone stores in the US and will be sourcing the goods from India. Our retail presence will have an omni channel presence as we also plan to engage in e-commerce in the US which has the largest retail industry. The first Chumbak store should get launched by next year and will be directly owned by us.’’

Currently, the six-year-old Chumbak has 16 company-owned stores and is seeking new investors to come onboard.

“Recently, we have started the process of fund-raising. We expect our old investors like Matrix Partners along with new ones to invest in our company.

The funds would be needed not only for entering the overseas market but also for enhancing technology for our online presence,’’ added Prabhakar, who sold his house to seed fund Chumbak in 2010.

However, unlike its 1,500-sq-ft stores, the stores being designed for the US market would be slightly smaller with merchandise across categories such as home, accessories and apparel.

“While the store sizes may be smaller, the prices across the lifestyle categories is expected to be higher as we have to bear the cost of logistics and will be shipping the merchandise from our base here in India,’’ he added.

Chumbak has its own design and marketing cells but sub-contracts the entire manufacturing of its products.

“We will not change our product mix when we enter the US market as we are a lifestyle brand not just catering to Indians living abroad,’’ he added.

While it does have an online presence, 70 per cent if its sales continues to come from its 16 stores which will be scaled to about 23 this year.

“We do have presence across market places like Flipkart, Amazon and our own site from which sales are about 30 per cent but the bulk of our sales continue to come from our offline stores,’’ Prabhakar added.

While Chumbak claims to be profitable at store level, breaking even at the company level may still take time.

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