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Reliance Retail to venture into franchising with Reliance Footprint pilot project in India

Reliance Footprint, the footwear chain of Reliance Retail, is seeking to enlist franchisees nationwide in a bid to accelerate growth. The move will also make it the first Reliance retail format to get into franchising.

“This format is amenable for franchising as we have devised a winning formula for us and the franchisees,” said Gopala Krishnan Sankar, chief executive of Reliance Footprint. “This is the second channel we are looking (into) for faster expansion and this will speed things up.”

Reliance Footprint currently operates around 130 stores nationwide and Sankar said the company has “mastered the model” after years of experimentation by tweaking formats and closing various non-performing stores. Reliance Footprint sells footwear, accessories and luggage of various brands such as Bata, Pavers, Lee Cooper, Red Tap, Clarks, Adidas and Puma.

India’s annual footwear market is estimated at around $4 billion and growing at 15%. It’s expected to swell to about $7 billion by 2015, PwC said in a report in August last year.

Sankar said the company plans to start with 10-15 franchise stores in various cities by March. Reliance Footprint then plans to add 40-50 franchise stores annually in addition to the dozens of company owned outlets it’s planning. Sankar declined to give numbers but said 20-30% of Reliance Footprint’s revenue coming from franchising in the next three to four years would be a “good number.”

The company will pilot its franchise model with Footprint and if this is successful it will pave the way for other Reliance Retail formats using this method of expansion, said another senior company official asking not to be named.

This includes Digital Express — 5,000 sq ft stores that sell televisions, mobile phones, tablets and other electronic items. They don’t stock refrigerators, air-conditioners, microwave ovens and other appliance that are sold through the bigger Reliance Digital stores, which are between 14,000 and 20,000 sq ft in area.

Reliance Retail operates around 1,550 stores in various formats, including hypermarkets and shops selling jewellery, books and accessories among others in 136 cities. It recorded a 31% jump in sales to Rs 3,456 crore in the quarter ended September, compared with the year-earlier period. The company reported profit before depreciation, interest and taxes of Rs 165 crore in the first half of fiscal year 2014.

 

Source: retail.economictimes.indiatimes

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