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Paragon Footwear plans to reach 150 stores by the end of FY24 – Sachin Joseph, exec VP

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Sachin Joseph, executive vice-president of Paragon Footwear on the five-decade-old brand’s journey, success mantras and future aspirations

Bengaluru: Paragon in a way embodies Kerala’s reputation as the largest rubber producer. Paragon, a brand originating from the state, has carved its niche with a distinct reputation for producing high-quality rubber footwear that has stood firm for almost five decades despite growing competition from global and Indian footwear brands.

Founded in 1975 with a daily production capacity of 1,500 pairs, Paragon has evolved to achieve a daily output of 4 lakh pairs at present and its total sales is approximated to 14 crore pairs each year.

While rubber footwear remains the flagship product, the Paragon brand extends its offerings  to include footwear made of Poly-Urethane (PU), Poly Vinyl Chloride (PVC), Ethylene-Vinyl Acetate (EVA), and Thermo Plastic Rubber (TPR) soles for men, women, and kids at a starting price of Rs 150.

In an exclusive interaction with IndiaRetailing, Sachin Joseph, executive vice-president of Paragon Footwear provides insights into the journey, success principles, and future aspirations of the 48-year old footwear brand.

What is the story behind the brand name ‘Paragon’?

When the family had thought of the idea of starting a footwear business together, there was no doubt in their minds that they wanted to provide quality footwear at the most affordable price. Therefore, the name Paragon, which means ‘a model of excellence’, seemed to be the ideal fit.

Which are the sub-brands of Paragon Group?

Paragon Group has three brands: Paragon, Stimulus and Eeken.

The main brand ‘Paragon’ caters to the mass of the country with products that are affordable in the market. This ranges from Hawai footwear, open footwear, school shoes, safety shoes and gumboots.

‘Stimulus’ offers a bit more premium products with better comfort to the customers while ‘Eeken’ caters mainly to the youth of the country and has more sporty shoes and open footwear. The products under this brand are comparatively pricey, with shoes starting from Rs 899 to Rs 2,000 and open footwear would be in the range of Rs 500 to Rs 800.

Any three success mantras of Paragon?

First mantra will be the emphasis on quality and durability. Although we have faced many issues recently with the soaring prices of raw materials, we have taken a conscious call not to reduce the quality we provide nor increase the prices drastically. We have state-of- the-art labs set up in each of our production locations that test both the raw materials as well as the finished products. Our market return was just 0.12% last year.

Next is a diversified product portfolio. A key strategy employed by Paragon involves offering footwear products that cater to a broad spectrum of customer preferences. We maintain a dedicated in-house footwear design team, tasked with creating designs and models that align with market trends and consumer demands.

Third element contributing to the success lies in availability. We have over 12 depots across the country that supply products to lakhs of multi brand outlets (MBOs) through our distribution channel of more than 500 distributors that have their reach to the remotest of areas across the length and breadth of the country.

What are the distribution channels of Paragon?

Paragon employs a dual-channel distribution strategy, leveraging both offline and online avenues to market and sell its products. Our products are available on various online marketplaces, including Flipkart, Amazon and Myntra. Additionally, we maintain a direct online sales channel through our own websites.

The majority of Paragon’s sales, exceeding 90%, are generated through offline channels, driven by the company’s robust foothold in general trade and multi-brand outlets.

Where does Paragon procure its raw materials from?

A substantial portion of our raw materials is sourced domestically from India. We also engage in procurement from international markets such as South Korea, Japan, Netherlands, China, Saudi Arabia and Germany.

What challenges have Paragon faced so far?

The most significant challenge is maintaining relevance for a broad audience while navigating cost-effectiveness amidst inflationary pressures. This challenge has become particularly pronounced given the dynamic nature of consumer preferences and the constant evolution of lifestyle standards.

Another challenge was to develop the other two brands. Since Paragon is known to be a mass market product, it is challenging to appeal to the youth of the country to consider our brand.

Although we launched in December 2019, and had 2 years of Covid disturbing the market, we were able to achieve a 120% growth in 2022-23 over the previous fiscal and we have already crossed last year’s figure by October 2023.

What is Paragon’s employee strength?

We have close to 10,000 direct and indirect employees.

Expansion plans for FY24?

Today, Paragon has 88 exclusive outlets across the country. We are aiming to increase the store count to 150 by the end of this financial year. The company is focusing on larger outlets spanning 1,500 sq. ft. and above, gradually transitioning away from smaller stores.

Having secured a substantial market share in the South and West regions, we are actively eyeing ongoing growth opportunities in the North and East markets.

In terms of global expansion, Paragon already has a presence in 18 countries and aims to strengthen its position in existing markets.

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