Mumbai, May 24: In a paradigm shift to expand its retail footprint, Siyaram Silk Mills Ltd has embarked upon an expansion spree by inking 27 franchise agreements in the first two months of current fiscal out of targeted 90 for 2013-14.
The successful response from the trade fraternity has encouraged the textiles firm to take its proposed franchise tally to 500 outlets by 2016-17, a Siyaram Silk release said. "Unlike food or health retail franchise, apparel retailing is not perishable and the logistics does not hamper the product quality. Hence, apparel or textile franchise has higher return on investment with low repayment time compared to other franchise segments," Siyaram Silk Mills Director Megha Poddar said here.
The expansion is expected to drive the company's high margin revenues from this segment to Rs 60 crore annually in 2013-14 from the level of Rs 35 crore last year, she said.
"On an average the franchisee has to invest Rs 25 lakh for interior works as well as for inventory with minimum space requirement being 800 sq ft. Moreover, we see a lot of interest in our franchisee model with budding entrepreneurs willing to invest Rs 25-50 lakh in our value enhancing retail model," Poddar said.
As part of the retail expansion, the company is also in the process of revamping and redesigning its outlets.
While the renewed focus is on franchisee framework, the company will continue with its conventional model of agent, distributor down to multi-brand outlet (MBO) model for disseminating its product portfolio, she said.
There is a general trend in the market towards shifting from multi-brand outlets to exclusive brand stores, Poddar said.
Currently, Siyaram Silk has 2,00,000 MBOs across the country. They are serviced through the conventional model of agents, distributors, wholesaler and retailer MBO and will continue to function in the same fashion, she said.
Siyaram Silk Mills is India's largest producer of blended high fashion suiting, shirting and apparels.