Kids-wear retailers take the franchise route to expand

Kids-wear retailing has never been easy. Yet, the lack of a significant national retail brand is making existing retailers expand their stores through the franchise route.

While Lilliput and Giny & Jony are restructuring their debt laden companies, a host of others like Mahindra Group-promoted Mom & Me, Toonz and Mothercare, have been trying to grow and expand their stores but mostly with the help of franchise partners.

“While there are severe challenges in kids wear retailing, there is also an opportunity. Today, there are hardly any kids specific retail brands at a national level. We intend adding 30 new stores this fiscal, all of which will be through franchises in new markets in the west and the north-east,’’ says Sharad Venkta, Managing Director, Toonz Retail.

Estimated at ₹25,000 crore, kids wear retail is pegged to grow at 20 per cent annually. Toonz India, with its 50 stores, believes that having the right business model in the kids wear segment holds the key to viable business.

“Since the average selling price of kids wear is generally less than that of men’s or women’s wear, we have decided to have smaller stores at 1500 sq to compensate lower net sales,” he added.

Going forward, all its future stores will be franchisee led with negligible investments from the promoters of the company.

Meanwhile, having crossed 100 stores, Mahindra Group-promoted Mom & Me Stores is also using the franchise model to expand into new territories.

“While the opportunity is huge in kids wear retail, there are challenges in terms of creating the right price point and products. We intend adding 20 franchise stores in smaller towns like Kolhapur and Sholapur and also in the north eastern states,” said K Venkataraman, CEO, Mahindra Retail.

Importing almost half its portfolio, Mom & Me has decided to focus on product procurement and sourcing while leaving the job of running its stores to franchises.

“Being a complex and challenging category, Kids retailers would rather focus on right product sourcing while its franchise partners are expected to help in locating real estate and managing the smaller format stores,” says Gaurav Marya, Chairman, Franchise India.

Meanwhile, kidswear brands like the debt laden Giny & Jony, which enjoyed national presence, is waiting to make a comeback post restructuring its company.

“Today, there is no big brand in the kids wear category. With our 50 odd stores we have not been expanding but once our restructuring is over in the next six months we will look at investing in the category,” said Anil Lakhani, Managing Director, Giny & Jony.

COMMENT NOW