Brand Factory scales expansion, to take on e-tailers

Future Lifestyle and Fashion is speeding up expansion for its discount chain Brand Factory as it prepares to take on marketplace retailers such as Snapdeal, Flipkart and Amazon. This move comes after the government allowed 100 per cent FDI in online marketplaces.

The Kishore Biyani led discount chain offers 200 brands such as Levi’s, Lee, Wrangler, Nike, Louis Phillipe, Allen Solly and Gini and Jony. The chain will offer 20-70 per cent discount on all products all the year round. Biyani defends his strategy by saying that they are offering discounts with Indian money whereas the online retailers are not.

Brand Factory opened its first store in 2006 and now has 46 stores across 20 cities. Recently, it opened its first store in Mumbai and now plans to have six stores in the city within a month. Plans are to double the store count in the next two years.

The chain will end FY16 with a gross merchandise value (GMV) at Rs 4,000 crores. It is similar to Myntra’s expected annualised gross sales for fiscal 2016 of around USD600-650 million However, Myntra has still to make profit while Brand Factory is already a profitable business. Biyani explains the secret behind the success as running a very tight ship with operations cost accounting for 12-14 per cent of overall sales. Also, Brand Factory gained scale in one geography before it expanded to a new one.