Gas Jeans targets tier-2 cities; seeks franchisees

Gas Jeans India Pvt Ltd, running on the wholesale cash and carry model, is planning to tap into the potential of tier-2 cities. Running on a franchise model with just three stores in Mumbai and Delhi, the premium denim brand is extending its reach beyond the metros to enter smaller cities such as Ludhiana, Pune, Chandigarh and Hyderabad. Gas intends launching 12 stores in the next three years and also turning profitable by the next fiscal.

“Tier-2 cities have the spending power and there are opportunities for the brand. We should start with the first store in Ludhiana followed by other cities like Pune and Chandigarh,” M M Kamath, director, Gas Jeans Pvt Ltd, told Business Line.

With a seed capital of Rs 6 crore, Gas is staying away from making big investments into the country till such time FDI is allowed. “All the 12 stores that were under the joint venture have been discontinued and today we run with minimal investments on the franchise model,” said Kamath.

Today the Gas brand is made at its home base in Italy along with other countries such as Tunisia and Romania in Eastern Europe. With steep import duties at 28 per cent, Gas is also looking at ways to reduce its dependence on imports. “There is a possibility of setting up a manufacturing base somewhere in South India in the future, but it is still early days to take a decision,” said Kamath.

There is also a likelihood of introducing online sales for the brand as it already has an e-commerce model in Italy.

Globally, Gas is a Rs 600-crore brand and in India the brand is aiming to achieve a turnover of Rs 40 crore by 2013.

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