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Brand Factory Ensures Profitability by Scale

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Brand Factory, India’s largest fashion discount store, was launched in 2006. The first store, touted as the destination store of the company, opened doors at Marthahalli in Bengaluru.
Speaking on the same, Suresh Sadhwani, Business Head, Brand Factory says: “Around 2006, end of season sale (EOSS) was not a big phenomenon. People would have only factory outlets, where they could go to seek discounts on brandedwear. However, these were small outlets with limited options. Brand Factory as a concept is a large store, where we can bring together ‘multiple factory outlets’ under one roof.”

Brands operating under Brand Factory

The company has tie-ups with several international and domestic brands. It is managed as a shop-in-shop (SIS) concept. “We offer the brands the required space while they put out their merchandise and manage the inventory,” says Sadhwani.

“In the basket of offerings, 60 per cent is other national and domestic brands; the remaining 40 per cent comes from our in-house brands,” he adds.
Strategy on profitability

“We ensure profitability by scale. The business operates on low margin–high volume matrix. We also keep our overheads and costs low. We select locations where Brand Factory is a stand-alone and largely destination store. This helps us get better rentals and we can pass on the benefit to customers. We manage operating costs through less manpower as compared to full price stores,” shares Sadhwani.
Product categories

The company sells fashion apparel for men, women and kids – in categories like formals, casuals, youth, ethnic, etc. The company also offers footwear, luggage, hand bags, and accessories for men and women, home linen and several more categories in the lifestyle segment. “To fill category gaps, we create category fillers like special size sets for customers. Youthwear is the most lucrative category at Brand Factory,” informs Sadhwani.

Target group

“We target men and women in the age group of 18 to 40 years. These are young, aspirational, fashion-conscious shoppers across the country,” as per Sadhwani.

He adds: “We are planning our growth regionwise, following a cluster strategy. We are strong in the south, followed by east and west. We plan to strengthen our presence further in these regions.”

Strategy on store positioning

The company only selects locations where Brand Factory can be put up as a stand-alone entity. “We do not select malls or hi-sreets. We simply create a pull through discounts and brands, and opt for tier-I and -II cities where the youth is aspirational but has limited means,” shares Sadhwani.
Marketing strategies

The company makes use of mass media to create awareness and walk-ins into the stores. The company also uses print, outdoor and radio plus below-the-line (BTL) activities.

Strategies to combat competition

“The market is big enough for online and offline retailers to co-exist. It is a huge market and still growing with new customers entering the purchase cycle every day. Customers still prefer touching and trying out new styles before making a purchase, and we cater aptly to that need,” says Sadhwani. He also informed that the company has no plans to foray into the e-commerce space in near future.

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