Future Group’s discount format, Brand Factory, is expected to go on an expansion spree with more acquisitions in the pipeline.
At a time when most offline discount formats have either exited or scaled down operations, Brand Factory plans to add 10-12 stores every year to consolidate its position as the leading discount retail brand among brick & mortar players with a pan-India presence.
“People are still scared of buying online and despite giving discounts not too many people are logged into some of these sites. This gives us the confidence to take Brand Factory pan-India . Since we have a dominating presence in the south, we would now like to take our stores to the north,’’ said, Brand Factory's business head, Suresh Sadhwani.
Discount-led retail chains like Loot and Grab It have already shut shop while others like Megamart (Arvind) and Max (Lifestyle Group) have moved to the value format. Selling one-season-old stock from its own retail formats while also sourcing from some of the brands directly, Brand Factory has a seamless model, much like the group’s fashion and lifestyle format, Central.
However unlike most of Future Group’s formats which are entering e-commerce, Brand Factory will continue with an offline presence but acquisitions could mean expansion. “We acquired southern chain Coupons a year back and are open to more takeovers going forward,’’ he added.
Launched in 2006, Brand Factory has managed its costs by moving out of malls into stand alone stores, mostly away from the city centre. “Since we have a lesser margin model, we cannot afford to be in malls which command 30 per cent of sales,’’ he said.
While it offers discounts across a host of brands, it is the group’s own brands and private labels which constitute a significant portion of its sales. “Today, private labels and in-house brands command 48 per cent of sales at our stores,’’ he added. Brands like Scullers, Lee Cooper, John Miller, Indigo Nation from Future Group’s fashion and lifestyle portfolio continue to sell the most at its discount stores. It has also diversified into the non-apparel space with footwear and luggage.
Brand Factory, with 41 stores, is a profitable format with a sales turnover of ₹1,000 crore.