Fashion is Rs 18 bn biz for S Kumars' Brandhouse

Brandhouse Retails, the retail unit of S Kumars Nationwide, is eyeing revenues of Rs 1,800 crore (Rs 18 billion) from its private label business. The company plans to open 180 private label stores in the next five years, according to sources close to the development.

"We are exploring options on whether to bring out private label stores ourselves or partner with any foreign player. We will sell high and fast fashion at affordable prices. It is like Zara at Indian prices," Tarun Joshi, managing director of Brandhouse Retails, which was demerged from SKNL early this year.

Brandhouse manages exclusive stores of four SKNL brands -- Reid & Taylor, Stephens Brothers, Belmonte, and Carmichael House -- and two foreign brands Dunhill and Escada. It has more than 600 stores now. The company plans to set up its first private label store early next year and the average size of the store will range from 8,000 to 10,000 sq ft, he added.

Analysts estimate that the country's clothing and textile segment will grow at 25 per cent till March 2011. Already, India's leading retailers such as Kishore Biyani's Future Group, Shoppers Stop, Mukesh Ambani's Reliance Retail, Aditya Birla Retail, Tata's Trent have their private labels in the apparel category.

Private labels carry margins of 30-70 per cent. Joshi said the company is in talks with six international brands to set up their stores in the country and that three have been shortlisted. However, he refused to name the brands citing non-disclosure agreements. Brandhouse will also retail two brands to be launched by SKNL soon, he said.

Meanwhile, Brandhouse plans to treble its revenues by the end of FY10 at Rs 1,070 crore (Rs 10.7 billion) from Rs 314 crore (Rs 3.14 billion) in FY08. The company is aiming for a business of Rs 700 crore (Rs 7 billion) in FY09.

The company plans to take the tally of its stores to 850 by the end of this financial year and to 1200 stores by FY10, Joshi said. "Matured stores will bring in more revenues for us. We have taken the total number of stores from 64 to 398 in a year, taking our revenues from Rs 50 crore (Rs 500 million) to Rs 314 crore (Rs 3.14 billion) . The 64 stores have achieved super maturity and new stores opened in the second half of FY08 will also get more sales," Joshi said.

The company is expected to list on the stock exchanges next month since it has obtained all regulatory approvals, he said.