Bagzone Lifestyles, which runs the popular handbag brand Lavie World, plans to capitalize on the robust demand in the market through the expansion of its offline presence by adding 50 new outlets this year, according to a top executive of the company.

As of now, the company has 50 exclusive brand outlets, of which 20 are company-owned and company-operated, while the remaining ones are franchised. “We plan to double the number in the next 12 months, and these would also be a mix of both company-operated (20-25 outlets) and franchised outlets,” said Ayush Tainwala, CEO, Bagzone Lifestyles. In addition, it is also present at multiple points of sale, from large stores to exclusive brand stores to online.

Additionally, keeping in line with demand sentiment, it will double its manufacturing capacity by establishing a new facility. Presently, the company produces approximately 2,00,000 bags monthly at its Nashik plant.

“We are in the process of building a second factory in close proximity to our existing factory, just outside of Nashik in the Igatpuri district. The new factory will be operational in the next six months and will increase the production capacity to 5 lakh bags monthly,” said the CEO. The aggregate investment across both units will be close to ₹100 crore, funded by a combination of promoters and banks, he added.

Growth

The company has seen significant growth in the last two to three years. Last year, Tainwala said that they grew by over 50 per cent year on year and had sales of ₹500 crore in FY23. According to him, the positive sentiment is driven by the company’s ability to have the right focus on the right products in the right channels.

“We get around 80 to 90 per cent of our business from Lavie Handbags, which is our core brand. Currently, we sell close to 3 lakh units every month and interact with about two and a half to three lakh consumers every month.”

Recently, the company launched a new high-end range called Lavie Luxe, with the products in this category priced in the range of ₹3,000 to ₹7,000. “The first capsule collection was launched about two months ago, and the response has been amazing. Now, we will launch the next season’s collection for spring/summer 2024 with another 60 to 80 options in our higher collection,” he added. Lavie World has three sub-brands: Lavie Handbags, Lavie Luxe, and Lavie Sports.

We estimate the market to be around ₹8,000 crore, of which the organized market will be around ₹2,500 to ₹3,000 crore. The company competes with players including Hidesign, Milano backpacks, and other domestic and international affordable luxury brands such as Guess and Steve Madden.

As the company claims that 50 per cent of sales come from outside of tier 1 cities, it is looking to tap into a few new cities in tier 2 and tier 3, which is where the growth of the Indian market is going to come from.

Today, “we are present in around 25 towns and cities, predominantly in markets such as Mumbai, Pune, and Bangalore. We are growing our network of stores in cities such as Bhopal, Gwalior, Raipur, Jodhpur, and Durgapur,” he noted.

Opportunities

The company also exports some quantities to the Middle East and Europe via online channels, but this isn’t as significant as its domestic business.

“We definitely see a lot of headroom to grow, especially in the Middle East and Africa, but will really start to focus on export markets maybe after a year or two, when we are able to saturate the domestic market,” Tainwala said

Another area to expand is the footwear segment, which already has a small presence and sales through online channels such as Myntra. “We currently produce small amounts of footwear, but we do intend to become more serious about it in the coming years,” he added.

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