Hamleys plans to double its stores in India

Hamleys is already the largest toy retailer in India with 26 stores across 14 cities since its entry six years ago. It now intends doubling its number of stores within the next two years.

Reliance Brands, the master franchise for Hamleys India, is already on the job of launching six new stores this fiscal in tier 2 cities like Bhopal, Coimbatore and Guwahati under different formats including its smaller express stores.

The toy industry may lack buoyancy but India has emerged as the third largest market for Hamleys after UK and West Asia.

India is already the largest market in terms of number of stores and is growing much faster at 33 per cent for Hamleys than countries in Western Europe where growth is in single digits today. While we have 88 stores across 23 countries, India is our third largest market after the UK and GCC countries,’’ said Gudjon Reynisson, Chief Executive, Hamleys.

In India, Hamleys continues to import the bulk of its toys from China for its private label and sources the rest from distributors like Funskool, and has also included popular Indian characters like Chota Bheem at its stores.

Darshan Mehta, CEO, Reliance Brands, said, “ India is possibly the fastest growing market for toy retail. Now we have six new stores under construction mostly in the tier 2 cities and should reach a total count at 32 stores this fiscal. Consumers are going to malls where we are present and we want our stores to be there in even smaller markets like Ludhiana. ’’

FirstCry expands its presence acquires BabyOye

One of the largest Online baby products retailer FirstCry has agreed to acquire Mahindra & Mahindra Ltd’s baby-care business BabyOye in a cash-and-stock deal that will help it consolidate its presence in the growing segment through an omni-channel strategy.

The deal is worth Rs 362.1 crore ($54.3 million). The move will help FirstCry expand its offline presence. BabyOye has about 120 physical stores, including some franchisee outlets, while FirstCry has almost 180 stores & Both companies have e-commerce.  As per the deal, Mahindra will operate all company-owned stores under a master franchise agreement with FirstCry, the companies said.

FirstCry was founded by serial entrepreneur Supam Maheshwari, in a statement  Mr.Maheshwari said the deal with the Mahindra Group will bring in synergies that will help FirstCry expand and achieve its profitability goal much faster.

Mahindra Group had acquired BabyOye in February last year. Later that year, Mahindra renamed its offline babycare store chain ‘Mom n Me’ as ‘BabyOye by Mahindra.’ This was the first M&A deal by an Indian business group in the e-commerce segment, which had until then seen mergers mainly among companies backed by common venture capital firms.

 FirstCry has emerged as a strong player in the segment over the years.  FirstCry has branded franchisee stores across 85 cities, besides its e-commerce site. In addition, it also has distribution partnerships with over 6,000 hospitals across the country. It runs its private label under the BabyHug brand.

In an omni-channel model, companies can create a large online brand supported by a large offline business and then you can integrate, leverage your inventory, own product brand or private label and leverage your customer behavior and loyalty to help build a more pervasive retail brand.”

US based EagleRider set to launch in India

US-based motorcycling experience provider EagleRider Inc  announced opening of its first franchise outlet in India here at the Capital. 

The company said domestic and international travellers will now be able to hire luxury motorcycles on self-drive and pre-determined guided tours or tailor-made adventure holidays within India and neighbouring countries like Nepal, Bhutan, Myanmar.

"We all know that riding motorcycles is fun. But riding a motorcycle as you explore a legendary country like India with so much history in every mile and so many interesting things to see and do is an entirely unique and unforgettable experience," EagleRider Founder and CEO Chris McIntyre said in a company statement. 

"EagleRider is immensely proud to finally be able to make that experience a possibility for fellow riders across the World," he added. 

The store offers motorcycles, which includes a fleet of Harley Davidson, Triumph and Royal Enfield. The premium motorcycles can be rented on daily or longer durations. 

Depending on the model and type, the rentals for the motorcycle can range from Rs 2,900 a day for Royal Enfield Himalayan, Rs 5,500 per day for a Harley-Davidson Iron883 or Triumph Bonneville to Rs 12,500 a day Harley-Davidson RoadKing, excluding petrol expenses. 

Apart from tours, guided or for self-drive, EagleRider India also provides a host of services like shuttle services, guides and hotel stays, as part of the packages, the company said.

The Great Khali eyes gym chain

The professional wrestler Dalip Singh Rana, better known by his ring name The Great Khali, to flex his muscles at the gym, is planning to set up 50 gyms in India in a year and then look abroad. The USP being a combination of gym with fitness and wrestling.

‘’The theme of the gyms would look like a wrestling ring. As members enter the gym, Khali will greet them with an automated voice message. There will be a Khali gallery, which will display and sell merchandise like clothes and boots,’’ says Ankur Makan, Khali’s man handling the project.

To be launched as the The Great Khali Gym & Fitness Club, the large format gyms spread across 4,500-5,000 sq ft will come with unique features like a lounge, kids area, the Khali gallery, marathon track and usual ones like two spas, two Jacuzzis, sweat room, which can be used by 40-45 people at any given time. Users will have to shell out Rs 27,000-28,000 a year, which is similar to what premium gyms charge in Indian metros. 

Khali’s franchisees will have to invest Rs 3.5 crore in gym infrastructure, including approximately Rs 35 lakh sign-up fees to be paid to Khali. A franchisee will also incur variable costs of Rs 50-60 lakh a year, but can hope to make revenues of Rs 3.5 crore a year. ‘’Assuming a gym can get 700 members, it can make Rs 2 crore per annum purely from gym revenues. Plus, it could hope to make Rs 1.5 crore in revenues from the lounge, the Khali gallery, self-defence training for kids, zumba, aerobics, power yoga,’’ says Makan.

The lounge will sell food supplements like protein bars that sell for Rs 2,000/kg while the gallery will sell merchandise for wrestling. These are likely to be the two key non-gym revenues, says Makan. Every gym will be personally inaugurated by Khali. ‘’He doesn’t want to compromise on the service parameters like hygiene, personal trainers, and wants to ensure that it doesn’t spoil his name,’’ says Makan. 

The first gym will come up in Jaipur by January, and the second one in Delhi. Gyms in Tier-II or Tier-III cities will be smaller— these will have fewer machines, and one spa and one Jacuzzi. Khali is doing this project under Continental Wrestling Entertainment (CWE), his company which has set up a wrestling academy in Jalandhar in Punjab that has over 350 students. After India, Khali wants to open gyms in markets like the US, Canada and Dubai, where he enjoys good following.

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.