Scotch & Soda inks exclusive franchise Partnership with Reliance Brands

Dutch apparel brand Scotch & Soda has struck a long-term partnership with Reliance Brands to open its stores in India, which was being sold exclusively on Myntra.com.

Reliance Brands, which runs stores of 19 international brands in India, including the likes of Muji, Kenneth Cole, Steve Madden, Diesel and Brooks Brothers, will start off by opening two stores next year for the Euro 600 million brand. 

The e-commerce rights for the brand will also move to Reliance at a time when fashion retailers are looking to deploy a multi-channel strategy of having physical stores as well as a notable online presence.

Scotch & Soda was founded by Laurent Hompes in 1985 and presently runs 160 mono-brand stores globally. In 2011, US-based apparel group Kellwood Company acquired the Dutch fashion brand. Darshan Mehta, president & CEO, Reliance Brands, said, "Myntra will be one of the channels for us and we will continue to sell through them. But we are now the exclusive master franchise partner of Scotch & Soda across all channels in India."

E-commerce, both mono-brand through scotch-soda.in and multi-brand online commerce would be an important part of our growth and reach strategy. We would also push multi-brand brick and mortar stores, Mehta said. Over the past year, conglomerates like Aditya Birla group, Mukesh Ambani-led Reliance Industries, which owns Reliance Brands, and Tatas have all spruced up their online commerce offerings particularly in the fashion and lifestyle category. Snagging online rights has become significant for retail groups which bring in foreign retailers to India. 

Scotch & Soda's CEO, Dirk Jan Stoppelenburg said that Reliance recognizes the brand's breakthrough style and creativity. "We are looking forward to growing our brand in collaboration with Reliance's expertise in this very important region," he said. Reliance Brands has over 200 stores across its portfolio. 

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Bata India to grow via franchise model

Shoemaker Bata India Ltd will slow down expansion of its own store network and hand out more franchises to tap into rural and semi-urban markets, a top company official said.

“This is something we have never done before,” said Rajeev Gopalakrishnan, managing director and chief executive officer of Bata, referring to the plan. “Currently, all our stores are company-owned.” He was talking on the sidelines of the annual general meeting of the company.

Bata, which sells over 50 million pairs of shoes every year, has at least 1,265 retail stores across 500 cities. But lately, it has started experimenting with the franchise model: its partners have launched around 30 stores in Gujarat, Madhya Pradesh and Uttar Pradesh. The initial response is encouraging, according to Gopalakrishnan.

Typically, Bata launches around 100 stores every year, but this will change as the company will now focus on expanding its distribution network through franchisees. Over the next two years, Bata aims to add 200-300 new stores under the franchise model.

According to analysts, this could, in the long run, turn out to be a more efficient model because Bata already has 7,700 workers. Opening new stores also means paying for real estate from its own finances.

A lot of companies are shutting loss-making outlets, which have high real estate costs, said Sreedhar Prasad, partner (e-commerce) at consulting and professional services firm KPMG. Instead, they are using that cash for online customer acquisition and on innovative sales channels, he added.

The rural market has a lot of potential, said Gopalakrishnan. But the company needs to offer a “different product line” for this market. Bata already has within its portfolio some products that are expected to do well in rural markets, but the company needs to develop more products priced between Rs.200 and Rs.1,000 a pair, he added.

In the last fiscal year, Bata added only 26 new stores. The company also sells select lines through some departmental stores. Currently, 80-85% of its revenue come from its own stores.

In the current year, it is looking to turn around at least 40-50 loss-making stores, said R.K. Gupta, director (finance) and chief financial officer. These will be refurbished and given a wider range of products to sell, but if they still cannot turn in profits, they will be shut, he added.

Online sales are growing, but for Bata, it is still at 1.5% of its total revenue, Gopalakrishnan said. Bata sells from its own e-commerce platform and through other online retailers such as Jabong and Amazon, but offers only a small collection for sale through this channel to protect its own retail outlets.

The footwear maker’s management remains circumspect about committing resources to shore up online sales. Bata wants to scale up online sales profitably, Gopalakrishnan said, adding that organically, online sales will grow to 5% of the company’s total revenue over the next four-five years.

Wyndham Hotel group set to launch its new brand Wyndham Garden

Eyeing a slice of India’s growing mid-market hotel pie, global hospitality company Wyndham Hotel Group is set to launch its new brand Wyndham Garden as per a report.

“We will be looking at introducing mid-market full-service brand Wyndham Garden in the Indian market. We want to launch it in the next six-eight months,” Deepika Arora, Regional Vice President-Eurasia, Wyndham Hotel Group, said.

In India, the group currently has brands such as Ramada Plaza, Howard Johnson’s, Days, Ramada Encore, out of its 16 brands globally. “India is growing towards mid-market so Wyndham Garden is a great offering in that respect.

“It is a typical business or a leisure destination hotel. It is similar to Ramada but with a different look and feel. It will work well in a metro or leisure destination,” she added.

The company has 3,000 keys across 26 hotels in India and 5,000 keys across 41 hotels under construction. About 60 per cent of its new openings are in tier II cities and the rest in tier I.

On whether the company is looking to launch any other brands here, she said: “We would rather push existing brands Howard Johnson and Days brands. Ramada Encore is a cookie-cutter brand which we would rather promote than getting another brand and then work on its promotion.”

The company, which has expanded in India using the franchise model, unlike other global players which have grown through management contracts, is now also looking at the latter option.

“We’ve done fairly well in the franchise model. We have grown from eight hotels to 26 in the last five years. Today, we are in a position where we are far more equipped to offer a management solution to a hotel owner compared to six years ago,” she said.

While the hotels currently in the pipeline will continue to be in the franchise model, the company is looking at offering management contracts too.

“We will look at tier I markets or a good leisure destination for the management contact model,” Arora added.

Globally, the hospitality company is working on the transformation of its brand image in order to make it customer-friendly. The brand will revisit the look and feel of properties as well as taglines across all Wyndham brands.

Taco Bell is embarking on an Expansion drive in India

Mexican Fast food chain Taco Bell Owned by the US-based Yum! Brands Inc., is embarking on an expansion drive in India and plans to open more outlets in 12 cities in the next four years.

At present it operates nine stores in three cities and plans to add three more outlets taking the number to 12 by the year-end.

The company has partnered with the promoter family of Dabur, the Burmans whose firm Burman Hospitality has taken the franchise for north and some southern markets such as Karnataka and Telangana.

“Our initial focus will be the top metros and their neighbouring cities. We are already present in Delhi, Bangalore and Mumbai. These three are important markets,” Taco Bell India managing director Ankush Tuli said.

Taco Bell plans to enter cities such as Hyderabad, Chandigarh, Chennai, Pune and Ahmedabad, The company plans to have multiples stores in big citie,s he said. “We are looking to 10-12 cities between now and 2020.”

Taco Bell is also tweaking and adapting some local flavours in its menu to suit the Indian palate. “We have now tikka masala burrito. We are among the few global markets of Taco Bell which has an R&D facility. The entire vegetarian range is made for India as we do not have vegetarian outside much of India,” said Tuli.

He said by the end of this year, Taco Bell would completely source raw material and equipment locally.