Online fast fashion brand FabAlley expects its offline stores to sustain its profitability status as it plans to take up its store count from three to 15 in the metro markets in 2018.

With a capex of $2 million, the new stores planned next year will be in new markets such as Chennai, Mumbai and Hyderabad.

The Noida-based fashion portal is expected to raise the money through debt instead of resorting to another funding series. It has already raised $3.5 million from investors such as India Quotient and Indian Angel Network.

“Going offline will drive more profitability and high growth in our operations. However, instead of going for a Series B, our next round will come from debt funds as we expect to have 12-15 stores by the end of 2018. The money will be used for capex and working capital. But when we raise our next round in Series B, it will be for building the brand and the supply chain,” said Tanvi Malik, co-founder, FabAlley.

With a GMV of ₹95 crore, the firm expects to open its next few stores in malls across metro markets.

“We are a prudent brand and expect to get profitable at every door since the focus is on bottom-line and not scale, and we do not believe in cash burn.”

Considering that online fashion brands like Yepme have burnt their fingers trying to set up offline stores, FabAlley is cautious while expanding its brick-and-mortar stores.

“Last year, we were loss-making, and this year, we managed to turn profitable. Since 95 per cent of retail is about offline stores, having an omni-channel strategy will help us sustain profitability,” Malik said.

The comapny has already set up 22 shop-in-shop counters across retail formats like Central. It started its pilot store at 350 sqft, and intends taking it up to 700 sqft for its new stores.

With its in-house designers, FabAlley believes it can create affordable fashion by having its own manufacturing facilities.

However, it may also seek to import some fabrics from China as it gains scale.

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