Apparel September 2019 Apparel September 2019 issue | Page 54

FEATURE
a person can visit, touch, and experience the
product offering first-hand, proves to be ideal.
And what with farmers and dealers in small towns
having the purchasing power, it has only fuelled
the growth of these stores in regions other than
metropolitan cities.
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I APPAREL I
September 2019
With massive retail spaces proving to be
expensive, the cost of owning and maintaining
it being another hurdle, rents skyrocketing, and
earnings not commensurating with the cost of
the space, brands are analysing each property on
the basis of its footfalls and returns. They are not
willing to keep a loss-making property as a white
elephant, and offset the losses against profits
from another property.
The space required in a mini store is 1/3rd
that of a normal store. In the case of Raymond,
the size of one TRS ranges anywhere from 600
square feet to 1,200 square feet as against
traditional sizes of 2,500 square feet. This also
provides small entrepreneurs and shopkeepers
with a chance to work in partnership, enabling
them to make effective use of their premises
and resources.
In India, where the growth focus is no longer
limited to Tier I and Tier II cities, and is slowly
moving to Tier III, Tier IV, and Tier V towns,
mini stores help brands in carving an exclusive
presence in a given area—if they were to set up
their own massive shops, the investment and
logistics would be prohibitive. On the other hand,
working through a set of smaller franchises
is easier and makes for a comfortable
expansion strategy.
One of the major upsides to this is that the
expansion to more stores is achieved with
modest investment. Most companies adopt an
asset-light model when dealing with such an
expansion strategy. In this model, the brand
helps in the managing and running of a store
and garnering business, for which it charges a
commission. It is a sustainable retail model with
which to expand to many markets. While the
running of the store, daily expenses, and more are
taken care of by the franchise owners, the format
WORKING THROUGH A SET
OF SMALLER FRANCHISES
IS EASIER AND MAKES FOR
A COMFORTABLE
EXPANSION STRATEGY.