Toonz Retail, a four year-old brand, says it will capitalise on the opportunity that exists in the kidswear business and expand the business, using its own brands, in tier-II and III towns. The company, been funded by agrochemical firm Crystal Crop Protection, has introduced two own labels, WowMom and SuperYoung, targeting infants and kids up to 12 years of age.
“We started by licensing characters and merchandise but realised that the margins were wafer-thin. Additionally, the shelf life of characters was short, as children outgrew them fast. We did a strategy realignment and launched our own brand,” Sharad Venkta, Managing Director and CEO, Toonz Retail said.
Toonz Retail has 45 outlets across India . “We are planning 50 stores by March,” he added. The company largely operates through the franchise route, with each outlet requiring an investment of ₹50-70 lakh. It started operations in 2010.
“We work on a cash-and-carry model with our franchisees. This helps us to retain margin,” he added.
Asked about its pricing, Venkat said that the company will keep it in the mass market range to attract more buyers. Toonz Retail is also looking to sell its in-house brands to other retailers and also create shop-in-shops.
The Kidswear segment has seen turbulence with home growns brands such as Catmoss, Lilliput and Gini & Jony under severe stress due to reasons ranging from financial crunch to spats with private equity owners. Most in-house brands had expanded too quickly. Additionally, brands with deep pockets such as the Mahindra-owned Mom and Me and Mothercare were also expanding fast by bringing in international brands and competitive pricing.
According to KPMG estimates, the kidswear market in India is ₹28,000-30,000 crore, and it expects this to touch ₹43,000 crore by 2016.