The discount retail chain Promart Retail India is targeting a turnover of Rs 200 crore this fiscal through its recently appointed 50 franchisees across states such as Maharashtra, Himachal, Jammu and Kashmir, Punjab, Haryana, and Rajasthan. The franchisee stores are likely to be operational in the next four to five months. With Promart’s foray into franchising, the company expects its overall sales to grow 33 percent. An initial investment of Rs 10 lakh would be required of the franchisee having an area of approximately 750-1,000 sq.ft.
“The strategy was on cards as the franchise route fits better than expected in our business model. It is the right time to enter a franchisee model for company’s growth and also to expand our footprint across India. The franchisee model promises assured returns for both the company and the franchisee,” said Punit Agarwal, CEO, Promart Retail. He added that 50 percent of the modern retail sales in India are through franchised outlets and therefore it makes a viable business option for Promart.
Agarwal said that the franchise stores will come up on both high streets and malls. However, areas offering lower rentals will be primarily targeted. According to him, Promart will follow a cluster strategy for its new stores following a state-wise marketing strategy. The company’s investment for each franchisee store will vary with individual city and the store location.
He further added: “The company does not follow a revenue sharing model for its franchisees but ensures healthy return on investments and attractive margins apart from offering a percentage of discount to its end customers.” He said that Promart will not open any store in metros and focus strictly on opening smaller stores in tier II and VI towns as they are easy to manage in terms of inventory on lower rentals and seemingly are more successful in India as compared to large-format stores.”
Commenting on the success mantra to run a discount retail chain profitably, Agarwal said that offering the right product, the right customer service, and catering to individual needs is essential. He also stated that providing a friendly environment to the customer is a must for a great shopping experience.
Promart, which offers discounts upto 60 percent on apparel and accessories is in talks with 20 more brands to extend its brand offerings. The company plans to open 100 company -owned stores and 50 franchise outlets in the next one year and is targeting a total turnover of Rs 450 crore this fiscal.
The retailer plans to enter smaller towns and cities where fashion is non-existent. The company claims to offer over 50 brands at its stores such as Levis, Pepe, Wrangler, Spykar, Arrow, Lee, Gini & Jony, Black Panther, J. Hampstead, 109’F, Sepia, Mufti, and Puma.