With growing smartphone sales bucking the slowdown trend, The Mobile Store is investing more in the ‘lounge’ format to provide an ‘experiential’ ambience for potential customers with its range of handsets.
The Essar Group-promoted mobile phone retailing company will be converting its existing 100 stores into the lounge format and also adding another 50 to further sales for its core category.
Himanshu Chakrawarti, CEO, said: “We need to invest Rs 40-50 crore in the lounge format. Since we have run out of internal accruals further infusions would be needed into the business. ``We are now exploring debt and equity options to raise funds.’’
After rationalising its number of stores, The Mobile Store has turned profitable in the past six months.
“Today, we stand at 750 stores and intend converting 100 of these into the lounge format. We have seen sales jump 70 per cent in our existing lounge formats in Pune and Delhi. Now, we intend extending this format in places like Noida and Bangalore,” he added.
‘The Mobile Store Lounge’ will stock phones co-created with the respective branded mobile phone players to bring out the special features of each model.
“The value growth in smartphones is today pegged between 14 and 15 per cent, unlike other durable categories which are stable.
“Through the lounge format we intend giving consumers an experience that would induce them to buy handsets more easily,” added Chakrawarti.
Creating affordability is also a priority for the chain and it has decided to give EMI (equated monthly instalments) without a credit card.
“Today, we are willing to give EMIs based on KYC (know your customer) documents,’’ said Chakrawarti.
The company has also struck revenue sharing deals with retailers such as HyperCity, More, Metro Cash & Carry and Landmark to set up shop-in-shop formats.
“Big retail chains help in generating footfalls and the cost of putting up a store is lower compared to a standalone format. Today, we are exploring opportunities with other retailers,’’ added Chakrawarti.
The Mobile Store intends launching its private labels for categories such as accessories and smartphones.