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Mr Utsav Seth, the 40-year-old MD & CEO of premium footwear brand Pavers England, believes he can derive greater value from his brand by running his stores himself than by franchising it out.
Pavers Foresight Smart Venture, the London-based joint venture between UK retailer Pavers and the Foresight group, has applied to the FIPB to invest $20 million in its single brand retail operations. The foreign direct investment, once cleared, will happen over a period of 24 months, says Mr Seth.
Manufacturing plant
Nor does the 30 per cent local sourcing requirement from small and medium enterprises faze him, since, he says, Pavers is already doing it. Mr Seth says that Pavers England has been sourcing almost 40 per cent of its brand requirements from India and the rest from Vietnam, Italy and China.
Also, in the past year, Mr Seth says, its $6-million R&D facility in the leather hub of Ambur, has been converted into a manufacturing plant with a capacity of three lakh pairs of shoes a year. Part of this will be exported and part will be used for distribution by the Pavers brand.
Mr Seth says Pavers has also invested $2 million in an R&D facility in Guangzhou, China, with 15 designers.
“In India, a prototype takes ages to develop; in China, if I give a design in the morning, by evening they show me a prototype,” he adds.
Asked why Pavers does not prefer the franchise route to expand, Mr Seth says emphatically, “The franchise route is difficult to control when you're expanding. The ability of franchisee partners to finance and scale up is limited. We have 26 stores now and we want to add 100 stores in the next 36 months.” The master franchisee for Pavers England is Triton Retail. Pavers will invest in Triton or may acquire 100 per cent and take over the retail operations once it gets the go-ahead from the Government, says Mr Seth.
The organised retail market for footwear is around Rs 7,500 crore and growing at 15 per cent a year. The market for premium footwear is growing even faster at 30 per cent a year.
Pavers, with Rs 55 crore in revenues last year, expects to make profits by 2013-14 and Mr Seth says the plan is to go in for an IPO in 2016. The brand has expanded its portfolio from men's and women's footwear to ladies bags, belts and other accessories.
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